When your review your car insurance policy – always think of coverage.
There are car insurance company’s that sell both full coverage policies and “basic-limit” policies.
Some car insurance company’s just sell “basic limit” car insurance policies. Some consumers just want a “basic limit” policy. One size does not fit all when it comes to car insurance. Let’s see what kind of car insurance in regards to coverages that you get with one of those “basic limit” policies.
With a “basic limit” car insurance policy your car is generally not covered. This is because a “basic limit” car insurance policy usually is a liability only policy. A liability only policy will only pay for damages to the other person’s car that you damage – if it is determined that you were at fault or in other words you were found to be liable for the accident. Liability damages can be very costly. If you want your car to be covered in an accident that was your fault – you would have to have a car insruance policy with full coverage.
The liability limit within a “basic limit” type of policy that is available for a pay out on a claim is generally a much lower amount than what is available in a full coverage car insurance policy. That is of course unless you specfically request to have the liability limits increased. Car insurance company’s fulfill their obligations within the insurance contract (policy) by paying up to (but not beyond) the liability limits that are stated in your car insurance policy. For example your car insurance policy may state liability limits of $50,000/$100,000 or $100,000/$300,000. And some state actually have a minimum liability limit that you can have on your car insurance policy. Each state is different, check with your state insurance department for specifics.