Should You Save Money by Skimping on Coverage? NO! 

It Depends on the Situation 

What works for one person may not work for another. In some cases, it’s a good idea to swap out a low deductible for a high deductible plan—but this doesn’t work for everyone. If you’re trying to lower the cost of your premiums, you may want to consider what coverage is most helpful before you consider dropping coverage in order to save on the costs of your insurance. In some situations, modifying coverage may not make sense, but it may make sense to shop around for a policy, ask about discounts, or improve your credit score for the sake of getting lower insurance rates. While it may be tempting to rush to change coverage, know that doing so doesn’t always help and, in some cases, that may make your financial situation much more dire if you drop coverage and are not adequately prepared to cover the costs of your vehicle after an accident. 

Uninsured Motorists/Underinsured Motorists 

Uninsured motorists insurance pays your claim when you are injured due to the negligence of another driver who doesn’t have insurance. Underinsured motorists insurance covers you when you are injured by a driver who does have insurance, but it’s not enough to cover the cost of your injuries. If you’re injured by a driver who doesn’t have insurance or doesn’t have enough insurance, there’s not a whole lot that can be done unless the driver has a lot of assets that personal injury attorneys are able to seize. Primary homes and vehicles generally aren’t able to be repossessed in order to satisfy a personal injury settlement or judgment. This means that if you sustain injury in a car crash, and the person who caused that crash doesn’t have insurance, you could be left holding the bill—unless you have uninsured motorists’ insurance. 

High Deductible 

In some cases, switching to a high deductible might not be such a bad idea. One thing you always have to keep in mind is the cost of the premium vs the cost of the deductible. Can you afford the monthly premiums, and can you afford to pay the deductible in the event of a car crash? Having a $2,000 deductible may make sense if you’re driving a beater and you have $2,000 to fix the car in the event it’s damaged in an accident. However, if you’ve got a deductible that’s way higher than what you can afford, you may not be able to get your car fixed in the event of an accident. In this case, a low deductible plan may actually be better.  

The Bare Minimum Policy 

Each state sets the bare minimum of insurance a driver is required to have in order to drive on the road. While a bare minimum policy can be a good idea for some situations, it’s not always a good idea. If you have a project car that sits in your driveway and isn’t ever driven, having a bare minimum policy on that car may not be a terrible idea. However, this will depend on the value of the car—a car that’s worth a lot of money, and likely to be stolen, broken into, or vandalized, may need a more substantial policy. If you’re doing a lot of driving, a bare minimum policy may not offer enough coverage. Being underinsured may be a problem if you cause a car crash and the person you’ve injured wants to ensure that you’re liable for the excess judgment. It may also be a problem if you have to go to small claims court for property damage. 

Getting Rid of Full Coverage  

You may be able to save some money by getting rid of full coverage insurance. However, this can be a very bad idea. If you cannot afford the out-of-pocket cost of repairing your car, it may be a good idea to have full coverage insurance. If you drive a very expensive car, live in an area with high crime rates, or live in an area with extreme weather conditions, you may want to consider having full coverage. This helps ensure that if your car is broken into, or is damaged by a hailstorm, you’ll be covered. If your car is leased or financed, you may not be able to drop your full coverage insurance. Typically, this is usually required by the lender. If you do drop full coverage when it’s required, your lender can charge you for special car insurance—and it’s typically much more expensive than standard car insurance. 

Candidly, insurance is one of the things that you pay for hoping that you never need to use it. However, if you do need to use it, you want to be sure you have enough to cover you in case the person who causes your injury doesn’t. Therefore, if you need to save a few bucks a month, you should consider canceling Netflix, or skipping Starbucks, before you decrease your insurance coverage.  

If You’ve Been Injured 

If someone else’s negligence has caused you to sustain injury in an accident, Moxie Law Group is here for you. Our personal injury attorneys are committed to helping our clients recover. Contact us today for a free consultation.