Buying the Lowest Level of Auto Insurance May Not Save You Money

In many countries, the three basic types of auto insurance are liability, collision, and comprehensive. When it comes to purchasing insurance, most people pay for the minimum level required by law, which is liability. Yet should you have an incident, paying for comprehensive coverage can save you money in the long run.

The different Levels of auto insurance, and how the costs compare, are explained in this article.


Liability covers damage to other vehicles, property, and medical care if you’re found to be at fault for an accident. There are different levels of coverage within this category. Some states will also require that you carry additional coverage for things like uninsured or under-insured drivers and personal injury protection.


Collision coverage adds to the cost of repair to your own vehicle in the case of an accident, even if you’re at fault for the accident. The insurance company pays for the remaining balance of the cost of repairs after you pay your deductible.


Comprehensive coverage includes both of these, plus some additional coverages. Most people look at the higher cost of this type of coverage and automatically reject it. The law doesn’t require you to have it, so why pay for it? Well, that depends. If you’re still financing your vehicle, your creditor may require this coverage in order to keep the car, but having this insurance will only benefit you in the event of an accident.

Examples of the Advantages of Comprehensive Coverage

You’re In an Accident

The easiest way to start is with an auto accident. Let’s say it’s something as simple as you’re driving through a parking lot to the exit after buying yourself a sandwich. You hear a car engine rev and the next moment a car comes speeding out of a parking space and backs into you.

Your car is still driveable, but it’s going to need bodywork. With comprehensive coverage, once you arrive at the body shop, your insurance company has arranged for you to be picked up by a rental company, which already has a car waiting for you. Insurance has a limit for how much they’ll pay per day plus for how many days, so the car might not be fancy, but at least you’ll have one. Getting a fancier rental car will cost you money out of pocket.

Insurance Arranges a Rental Car For You

When your own car is ready, you drive the rental to the agency, and they drive you to the body shop. With just liability and collision, you would have had to arrange to get to the rental agency, negotiate with them on cost per day and length of rental, then get yourself back to the body shop when you drop it off when your car is ready.

The Higher Risk of Commuting

If you live in the suburbs and commute to work, your chances of being in an accident are greater. Parking your car in a public parking lot, where people know that cars will be sitting unattended for several hours, makes it more vulnerable to break-ins and theft attempts. Reaching your car after a long day at work to discover a broken window and your steering wheel column broken out is not a fun experience.

When Your Car Isn’t Even There

Likewise, walking out your door to discover your car’s not even there isn’t fun, either. In both of these cases, having comprehensive coverage pays off when your insurance arranges for towing, repair, and a rental car.

Holding money

You Still Have to Pay Your Deductible

Do keep in mind that in all of these scenarios, you’ll still have to pay your deductible, especially if you just bought a new car and wrecked it. With comprehensive insurance, though, that’s all you pay. Plus you have the comfort of your agency arranging for your repairs and rental cars.

Comprehensive Coverage Reduces Stress

The stress of not having to deal with car rental agencies and transportation to and from a repair shop can count for a lot, especially if you don’t have someone who can follow you to the shop and drive you to the rental lot. This also works if you don’t come from a multi-car family or a situation where you can “borrow ” someone’s car for a period of time. Rental cars aren’t cheap. Neither is paying for a cab or driving service.

Comparing Costs

There are multiple websites available now that will compare the cost of auto insurance for you. The days of having to sit down with pencil and paper in front of a phone and calling each insurance company individually for a quote are gone. These sites allow you to compare by income, age, your living situation, and location, etc.

There’s nothing wrong with going with just liability insurance when you’re just starting out and money is short. When you start having enough to buy yourself a new car, though, you may want to reconsider the level of insurance you’re carrying. Sometimes paying a bit more upfront can save you money and stress in the long run.

Leave a Reply

Your email address will not be published. Required fields are marked *