What a great question. Many people think that if the car isn’t worth much then it is not necessary to insure it. But even if your family car has little value, you will still need to carry some insurance on it.
Your automobile insurance policy is comprised of multiple types of coverage. You usually have some flexibility in the types of coverage as well as the amounts of coverage on your plan. With that said, just about every state has laws that require drivers to carry liability auto insurance and many states require proof of coverage in order to register your car.
It is required that drivers carry liability insurance. This type of coverage provides financial protection from liability claims against you when you or a family member causes an accident that results in bodily injuries to other people or causes damage to their property. Every state has mandatory minimum limits of liability coverage.
Comprehensive and collision insurance is another type of coverage included as part of your automobile insurance plan. The collision and comprehensive coverage reimburses you for physical damage to your own vehicle resulting from collisions and possible other causes such as falling objects or fire. You may not want this type of coverage if your car is worth less than $1,000. The most you would receive in reimbursement would be its actual value after depreciation and depending on your deductible, that probably isn’t much. Some car owners only carry liability insurance on the family clunker.
If you have questions about the coverage of your existing automobile insurance policy, call Insurance Doctor.
