Impact Of Limited Liability On Auto Insurance Quotes
Auto insurance quotes, whether obtained online or in person at a brokerage, will always contain some amount of liability. The minimum amounts will be determined by a state's insurance commission, but every quote will include differing amounts depending on what a client prefers as well as what the insurance company recommends. While there are a number of different types of liability coverage that make up a typical insurance quote, having a balance is essential to making sure that you are both safe on the road and that you are well-protected should an accident occur. One way that customers will often try to save money on their auto insurance quotes is to reduce their coverage to include limited liability, but this can have a number of effects.
The first will be the lowering of auto insurance quotes. Less liability coverage means less paid out by the insurance company in the event of an accident, and therefore less risk to the company. The quote offered and associated premiums will be less for a client carrying lower amounts of liability. To further reduce premiums, some customers also choose to increase the amount of their deductible, which means that they must pay a greater amount before their insurance will become active. Together, limited liability and a higher deductible can significantly reduce a premium, but may make the aftermath of an accident much more difficult.
The other effect that limited liability will have on auto insurance is to increase the amount that an insured will pay out of pocket. Lowering property damage or bodily injury coverage to minimum levels will mean that monetary reserves will be quickly used up, especially if there are multiple people who are injured or multiple cars that are badly damaged. Lowering liability can provide an immediate relief to auto insurance quote prices, but may prove to be extremely expensive in the long run if an accident occurs. Choosing to do so is a matter of personal preference combined with an assessment of risk. A safe driver who drives only rarely will have a far smaller chance of an accident than someone who drives often, and limited liability may be a viable option in the former case.
Before choosing to limit liability on a policy, speak to an insurance agent or email a company to ensure that it will provide the best cost-to-benefit ratio. Ask about what kind of coverage can be reduced and to what extent, as well as the procedure and cost to have coverage raised again. While limited liability may mean up-front reductions in insurance quotes, the potential long-term effects must be weighed carefully by anyone considering this option.