Reader question:
I bought a cash car recently. It works okay, but it’s old and not perfect. I don’t want to go over the top with it with the insurance, but what should I get?
Ira
Great question, Ira.
Used cars put a lot of people in a fix when it comes to insuring them. Usually you have to pay a lot more for repairs, but at least you aren’t paying a car note; all the same, it’s still a little hard to afford the insurance payments. Still, every car needs some kind of insurance. With a car that you didn’t pay all that much for, though, you’re okay with going a little lower on the insurance line.
All states require at least liability on cars, maybe more. This protects you against liability claims against yourself when you or somebody else is the cause of a car crash that damages property or injures somebody. Most state minimums don’t come close to covering the costs of claims from serious accidents, so if you want to protect yourself, get higher than the minimum. This part of your insurance policy remains important regardless of the kind of car you have.
As for further coverage on your vehicle, consider how much you paid for it and how much it’s worth, period, before deciding whether to add them. If you bought a cash car for $1000, and you’ll be paying $2000 premiums every year for full coverage, it doesn’t make a lot of sense.
The best way to go, then, is to protect yourself with the most liability coverage you can, but take the rest of the coverage as you go.
Cheers,
Fashun Guadarrama.