If you want to have the absolute minimum auto insurance you can, then in most states you will be required to hold liability auto insurance. This type of auto insurance doesn’t really help you at all if you cause an accident, but it’s great for the other driver involved. This type of insurance is generally the cheapest sort you can get.
Basically, liability auto insurance doesn’t cover your own vehicle at all if you cause an accident. If your vehicle is damaged or destroyed, you won’t receive any assistance from your insurance company to repair or replace your car. However if you damage someone else’s vehicle, they will still be covered. Their medical expenses will also be covered up to the limit of coverage you have.
Holding liability auto insurance is definitely risky. If you wreck your car in an accident, then you’re either going to have do with a vehicle or else you will need to find the money to buy another one. If, however, your car is old and not worth much, that may not bother you too much. Certainly if you could find the money to buy another car, it may be worth just holding liability auto insurance so that your insurance premiums are lower. If you’re leasing or paying for your vehicle through a finance company, you will probably find that liability auto insurance isn’t sufficient. Most of the time they will require you to have a higher level of coverage, such as comprehensive insurance and collision coverage.
The good thing about this insurance is that you’re protected no matter what sort of car you run into. So your $2,000 car might not matter too much, but that $200,000 sports car you run into could make a serious dent in your financial situation without liability auto insurance. Even so, it’s important to make sure your medical expenses are covered even if you’re at fault. If you already have personal health insurance you may be covered, so it doesn’t matter if medical expenses aren’t covered under your auto insurance.
Remember, too, that if an uninsured driver hits your car, you won’t have any insurance coverage to pay for the repairs. It’s easy to think that because you’ve driven for 10 years with no accidents that your run of good fortune will continue, but the whole point of insurance is to think about the worst-case scenario. If you’ve done that, and liability auto insurance is still the best choice, then shop around online for the best price.