Liability Only Car Insurance?

Liability Only Car Insurance?

September 13, 2011

There is a variety of auto insurance coverage types including basic plans to full/comprehensive coverage policies. A liability only policy provides coverage in a limited capacity and could possibly affect your insurance coverage price.

What is liability only insurance?

Liability only car insurance in Austin, TX is required by law. A liability only policy means if you hit someone/something, your auto insurance policy will cover the damage and medical expenses to the person or property you hit (but not your own damages!). This includes both bodily injuries and property/car damage. If you are looking for Cheap Austin Car Insurance, a liability only policy might be a solution for you. But, it is really important to understand why a liability only insurance plan might NOT be desirable for your situation.

Is liability only auto insurance cheaper than comprehensive/full coverage?

Yes, because the “liability only” policy does not include coverage for your own car or bodily injury (medical) expenses, you incur that responsibility on your own. Liability coverage only protects other drivers and their cars.  When you add coverage to protect your vehicle and avoid incurring your own medical expenses, you are also adding more premium.  Therefore, liability insurance is cheaper than full coverage.

How do car insurance deductibles work for liability only car insurance?

A deductible is used when there is damage to your vehicle or property. Therefore with a liability only policy, there is no deductible. For example, if you have an auto liability only policy and you hit someone and caused damage to their car, but your car did not have any damage, then you do not pay a deductible. You only pay a deductible to have your own car fixed. A liability only car insurance policy is cheaper because it is YOUR responsibility to fix the damages to your car, not the insurance company’s.

Why get liability only car insurance in Austin, TX?

You should only consider liability only car insurance if you have the means to pay for damages to your vehicle on your own, out of your own pocket.  When you’ve paid off your vehicle loan, the physical damage and financial responsibility transfers from the lien holder to you.  Just because it’s not required anymore doesn’t mean you don’t still need it.

In summary…

Although liability only car insurance is required by law, it doesn’t cover your expenses from an accident. And in the event of an accident where you are at fault or hit by someone without insurance, a liability only plan can end up costing you significantly more in the long-run. So do yourself a favor and seek to understand the differences between cheap auto insurance and affordable policies that work best with your situation.