Pros And Cons Of Purchasing A Minimum-Coverage Only Auto Policy
The price you will pay for your auto insurance premiums will be based on many factors, but a big factor is the type of coverage you choose for your policy. The cheapest option you have is to pick a minimum-coverage only auto insurance policy, but before you do this, it is important to understand the pros and cons of having this type of policy.
What a minimum-coverage policy is
The first thing to understand before learning about the pros and cons is what a minimum-coverage only policy is in terms of auto insurance. With auto insurance, there are state requirements for auto insurance you must have if you plan on driving and while every state has its own set of rules, every state has rules relating to minimum policies. A minimum-coverage policy basically offers just enough car insurance to meet the requirements and it offers nothing more than just this. In other words, it is a policy that gives you the bare minimum of coverage required by law.
The pros of minimum-coverage only policies
The main benefit of a policy like this is the costs for the policy. The costs of a minimum-coverage policy will be the cheapest type of coverage you can possibly buy, as it will only give you a small amount of coverage. The main type of coverage you will have with this type of policy is liability coverage. Liability coverage protects other cars in the event that you cause a collision and the other cars end up damaged. The other benefit of a minimum-coverage only policy is that you will be able to legally drive with this type of policy.
The cons of minimum-coverage only policies
In addition to the pros of this type of coverage, you should understand the downsides too. The main downside you have with this type of coverage is that it really does not offer you any coverage at all. If you cause an accident, you will not be able to file a claim for the damages to your car. If you are injured, you would not be able to collect money from your insurance company for the medical bills. You basically have no coverage for yourself with a policy like this.
If you are not sure what type of coverage you should have, you may want to talk to an insurance agent about your budget, needs, and risks to find out what the agent recommends for your situation.
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