Understanding Liability Law For Your Auto
If you want to own and drive a vehicle in the United States you will probably have to live up to a policy that required you to have an insurance policy covering the vehicle. Depending on whether you own the vehicle or not you will have to purchase either a full coverage or liability insurance policy. A full coverage policy will cover any damages done in an accident regardless of whose vehicle and property are damaged. The liability insurance policy only covers damages to property and vehicle that belong to anyone involved other than the policy holder.
The cheaper of the two policies is the liability insurance policy. It can be a considerable amount cheaper than the full coverage policy. If you are going to purchase a vehicle and get it properly licensed you must have an insurance policy in place for that vehicle. If you own the vehicle and hold the title you can purchase the minimum coverage that a liability policy provides.
If you do not own the vehicle yet and are making monthly payments to a financial institution or bank in order to purchase it, you will, in most cases, have to purchase a full coverage insurance policy on the vehicle. If the bank or financial institution owns the vehicle still, they want to you have full coverage so that the damages done to the vehicle will be covered by the policy.
The insurance policy companies know that if you only held liability insurance and the policy would not cover to get your vehicle fixed, you may not make the future payments if you cannot drive it. While it may be inconvenient to pay for the full coverage policy, it will make a difference if you get into an accident.
Another thing to consider if you own an older model vehicle that you hold the title to is what the value of your vehicle is. Insurance policies, both full coverage and liability, come with a deductible on the covered damages.
If your deductible is five hundred dollars and the vehicle is only worth five hundred dollars, you will not get anything from the insurance policy because your deductible and the cost to total out the vehicle negate each other.
If this is the case, the law still requires you to hold an insurance policy to drive so you might be better off paying a lower amount for the liability insurance policy so that you still meet the requirements of the law but are not paying more for the replacement of your own vehicle when it’s value is not more than the deductible.
April Kerr owns website JeriMoberly which has information on inexpensive umbrella insuranc and cheapest umbrella insurance companies.
Tags: accident, auto, automotive, Cars, coverage, Finance, financial, insurance, insure, liability, policy
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