What are the benefits of obtaining liability insurance for your car? Well to begin with it is illegal in most states to drive without, at the very least, liability. What is liability coverage, what exactly does it cover? It covers the damage that you do to others in the event of an auto accident, including bodily injury and property damage. Which means if you get into an accident your liability coverage would cover the cost to fix the others car, their medical bills, lost wages, and if you damaged any property in the accident. It would even cover part of the cost if you were sued because of the accident. Providing, of course, that you have enough to cover it all. The one major drawback, however, is liability coverage does not cover your damages.
The cost of your auto insurance can vary for many reasons. One of which is the level of coverage that you have. For example, your insurance provider may have many levels of property damage liability. Usually the minimum is $10,000, then they go from there in ten thousand increments up to $100,000, all for a higher premium. So for instance if you pay $50 per month for your property damage portion with a limit of $50,000, and you decide that is too high, you can effectively lower your monthly premium by just lowering the limit. Reducing it to say $25,000 can cut your premium in half! Rates vary from company to company for the same coverage also. A rate with Travelers, on of the more established insurance companies, for that coverage was around $90 per month. But a lesser known company, Unitrin direct, the monthly rate was around $80. And Esurance, a company that prides itself on ‘saving time, saving money’ was around $70 per month.
Let’s look at the liability rates in Texas. For a married female, age 25-65, no traffic violations, average credit, driving a truck to and from work, with a comfortable 50/100/50 (meaning $50,000 per each injured person, $100,000 total per accident, $50,000 property) coverage, the range is astounding.
From the least expensive at $199 annually all the way up to $810 annually! If you lower your coverage to 25/50/25 which is the states lowest minimum allowed coverage the range shifts to low end $97 annually and high end $505 annually. This also is many different companies which have many different formulas for calculating the how much of a risk they perceive you to be. Check out multiple companies before going with one, different companies offer many discounts for the more types of insurance you carry with them.
California has stepped up and decided to help out some of the lower income drivers out there with the California Low Cost Automobile Insurance Program. It was designed to stem the tide of uninsured motorists on the roadways. Millions of dollars are spent annually by motorists who had their insurance paid and up to date, but got hit by someone who didn’t. With this program insurance companies are required to offer a reduced rate to motorists with clean driving records whose annual income is less that $50,000 per year. The rate is around $330-350 per year depending where you are located in the state. But they also have some of the lower requirements for liability at 15/30/5. The state requirement for all others not on this program is 10/20/3. In the end you must decide by weighing all of the different aspects of liability insurance to determine the level of coverage that is right for you.
