If you have never purchased auto insurance yourself, you will likely have some questions. One of the top questions people have when buying their first insurance policies is about liability insurance. What is this insurance type, and is it enough? Everyone has a unique situation, so it might be enough for one person but not for everyone. Here is an explanation of what liability insurance is and how to determine if it is enough for you.
The Basics of Liability Insurance
Liability insurance is the type of auto insurance that most states require of all drivers. When you have liability insurance, it protects you in some ways, but it primarily protects other drivers you encounter. It protects other drivers by paying for their claims if you cause damage to them through collisions. It protects you by providing insurance for their claims, which prevents other drivers from suing you after you cause an accident. You should always carry liability insurance on your auto insurance, and it is the cheapest form of insurance to have.
It Is Enough in Certain Situations
There are situations when drivers can get by with liability-only policies. If you have a car that is not worth a lot of money, you might be fine with liability only, as long as you do not have a loan on the vehicle. Buying a policy that only includes liability coverage will be the cheapest way to obtain auto insurance coverage.
It Is Not Sufficient in Other Situations
If you have a loan on the car, you likely cannot purchase a liability-only policy. Your car lender will not let you. They will require more coverage, and they will tell you what types to get. In most cases, car lenders require collision and comprehensive coverages on a vehicle when a person owes money on a car loan. Secondly, liability-only might not be enough if you have a valuable vehicle, even if you do not have a loan. If your car is worth a lot of money, you can protect it by adding additional coverage to the plan.
Why You Should Never Drive Without Car Insurance
After reading this, you might have a better idea about what liability insurance is and whether it is enough for you. You should always keep auto insurance in place if you drive, as you can suffer major consequences if you drive without it. If you have questions about coverage, contact an insurance agent that offers cheap car insurance policies.