After you invest your money into a new vehicle, it can be tempting to save a little money and skimp on your insurance coverage. However, you should not only pay for the minimum insurance coverage. Getting just minimum coverage can be a really costly mistake if you get into an accident.
Reason #1: No Protection Against Uninsured Drivers
If you get into an accident with someone who doesn't have insurance, or you are involved in a hit or run accident, you are going to have a damaged new vehicle, with no money to fix your vehicle with if you go with the minimum insurance coverage.
If you add on uninsured or underinsured driver coverage to your policy, and you get into an accident with someone who doesn't have insurance, you are going to be okay. Your insurance company will give you the money to fix up your vehicle.
Reason #2: No Protection Against Accidents that Are Your Fault
When you just get the minimum amount of insurance coverage, you are basically only carrying coverage to pay for someone else's vehicle or medical bills if you get into an accident. If you are responsible for an accident, and you just have minimum coverage, you are not going to get any money from your insurance company to fix or replace your vehicle.
If instead you pay for collision coverage, and you are responsible for causing an accident, your insurance will have your back. They will help you fix up or help replace it, even though the accident was your fault.
Reason #3: No Protection Against Other Damages
Lots of things can damage your vehicle, such as hitting a deer, or driving through a hailstorm, or having a tree branch fall on your vehicle. Minimum coverage will not help you out in this type of situation.
However, if you pay for comprehensive coverage, and one of these events happen, your insurance will have your back. This type of coverage is especially important when you are still paying off your car loan.
Reason #4: Not Enough Protection
Finally, when you just go into minimum coverage, you are not providing yourself with enough liability protection. If you get into a serious accident and are responsible for the accident, your minimum coverage may not cover all the medical bills that the other party incurs.
In that case, they can bring a lawsuit against you and go after your other assets and personal belongings if you don't have enough insurance coverage. It is usually best to increase the basic limits that come with bodily injury coverage.
If you just purchased a new vehicle, don't just go with minimum coverage. With minimum coverage you will not have enough liability coverage, and you will be lost holding the cost of fixing your vehicle if you are hit by an uninsured driver, if your vehicle is damaged by something other than an auto, or if you are responsible for an accident. Instead, add uninsured driver's coverage, collision coverage, and comprehensive coverage, and increase your bodily damage coverage. Contact an auto insurance provider for more information.