Drivers have faced significant increases in auto insurance premiums since the COVID-19 pandemic.
In fact, nationally, auto insurance increases far outpace both health insurance and homeowners insurance.
That’s why more and more drivers are choosing to carry only the state’s minimum liability insurance when they hit the road.
If finances are tight, it will be much cheaper than full coverage.
But one woman learned she could lose thousands of dollars if she was involved in an accident or had her car stolen.
Car theft, no compensation
Bernice Evans said a thief broke into her first-floor apartment one recent night and stole her car keys while she was sleeping.
“They come in here and take both of my car keys,” she said, pointing to a table by the door. “They walked out my door and stole my car.”
When she woke up, the Ford Escape she relied on for essential transportation was gone.
Worse, she says, when the police finally found out, they had bad news for her.
“That’s all,” she said.
Then the second blow happened. Her insurance company told her she had no coverage for the theft.
“I was responsible because I couldn’t afford full insurance,” she said. “It’s just a responsibility.”
W.C.P.O.
Bernice Evans
Divya Sangameshwar, an insurance expert at Value Penguin, says liability-only coverage can be very risky.
“Liability insurance is literally one step ahead of being uninsured,” she says.
If you cause an accident, she says, insurance only applies to the other driver, not you.
And in the case of theft, a tree falling from your roof, or a collision with a deer, you won’t be covered for anything because there is no so-called “comprehensive” coverage.
What you can do
She says to compare at least three quotes for a full coverage policy, as opposed to one that only covers liability.
“We did the math and found that there is an average price difference of $1,300 between insurance companies offering similar coverage to the same driver for the same car,” Sangameshwar said.
He says also ask about discounts like bundles, usage-based discounts, and discounts for teachers and first responders.
Alternatively, you can choose a higher deductible to lower your rates.
With a higher deductible, “you might end up paying a little more out of pocket for repairs, but it’s not a big enough risk to switch to liability-only insurance,” she says.
Finally, we will ask about the cost of comprehensive insurance that covers natural disasters and theft.
Meanwhile, Bernice Evans now has to rely on her family to drive her around.
“I can’t go to the grocery store,” she said. “I can’t go to my doctor’s appointment.”
She wants to scrape together a few thousand dollars and buy a new car.
And now she wants to make people aware of the downsides of having minimal insurance so they don’t waste their money.
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