Misconceptions About Liability Only Auto Policies

Misconceptions About Liability Only Auto Policies

January 14, 2012

Most people do not understand what a liability only auto policy covers and does not cover. It is important to know the myths and misconceptions:

Myth #1: Liability Only Is Cheaper

Liability only car insurance in Austin, TX is not necessarily cheaper than companies that offer full coverage.  There are cheap auto insurance companies that offer liability only policies at the same premium rate for each person, penalizing those with good driving records and offering individuals with tickets and accidents a “discounted” rate.

Myth #2: If You Own Your Car, You Only Need Liability Only

Cars that are paid off do not just need liability only insurance. Why? Because, if someone hits you and does not have insurance (or enough insurance) you are still held financially responsible for the damages to your car and your medical expenses.  Another reason is because damages that aren’t your fault, for instance hail damage or a tree falling on your car, or even hitting an animal won’t be covered.  Also, if you are at fault in an accident, you are the one responsible for your damages.  You should only purchase liability only insurance if you are prepared to incur the expenses of fixing your own vehicle and have health insurance that could pay for your medical bills if you’re injured.

Myth #3: You Will Save Money With A Liability Only Policy

Liability only insurance can be cheaper than full coverage if you do not have any accidents or claims. However, liability only insurance has a lower monthly premium than full coverage, your financial loss when you are at fault in an accident could be much more than the monthly premiums for a full coverage policy over several years.