If you're like most modern consumers, you want to save as much money as possible on living expenses so that you've got something left over for leisure and investment purposes. One of your savings strategies might be to carry the minimal amount of car insurance required by your state -- and this can result in significant savings if you drive a vehicle that's completely paid off. However, carrying minimal car insurance may not be the best plan for your particular situation, but on the other hand, it may be the best way for you to go. Here's a list of situations where carrying as little car insurance as possible might make sense, although you should talk to your auto insurance service.
You're Significantly Solvent
One of the major issues that those carrying minimal amounts of car insurance face is that they can't afford to replace their vehicle if it gets totalled in a car accident. Unless you have money earmarked for this type of emergency, you could encounter serious hardships if you suddenly find yourself without a vehicle, particularly if you depend on the car to get to work or school and are outside of areas serviced by mass transit.
Minimal insurance typically doesn't cover vehicle replacement costs or pay for damages to your own vehicle after an accident, so talk to your agent about having a rider included in your policy that provides this service if you don't have enough savings on hand to replace or repair your car.
You Don't Drive at Night
Research performed by the National Safety Council shows that driving at night comes with a triple risk of becoming involved in an injury accident. Along with limited visibility, you're more likely to be sharing the roads with drivers who are intoxicated during that time. If you live in an area that experiences cold winters, roads are more likely to be icy when it's dark outside.
If driving at night isn't a part of your routine, you may be better positioned to go with a bare bones insurance policy than your night-driving counterpart. As an added benefit, you may actually qualify for reduced rates if you never or rarely drive after the sun goes down.
You Don't Drive Much
It stands to reason that the less you drive, the less risk you run of getting into an automobile accident. If your car is basically incidental to your everyday routine -- if you could easily live without it for awhile -- going with minimal insurance may make sense. You may even get be eligible for reduced rates if your mileage is low, but keep in mind that you may be required to provide your insurance company with odometer ratings that reflect your mileage.
If you don't drive much but occasionally take your car on a road trip, talk to your insurance agent about the possibility of purchasing extra coverage for road trips only so that you won't have to pay for that particular coverage during the rest of the year.
You Live in a Rural Area
Your insurance premiums will be lower in most rural areas than in their urban counterparts because the chances of you getting into an accident are lower -- which means that you may be able to get away with carrying only minimal liability insurance. However, this could be a double-edged sword -- if you live rural and your vehicle becomes damaged in an accident, you'll be facing a hardship if you need the car to get to work, to the grocery store, or to medical appointments or other obligations.
As you can see, there are no cut-and-dried answers to the question of whether or not carrying minimal insurance is right for you. Your insurance agent will be able to help you devise a customized plan that takes your individual situation, needs, and preferences into consideration.
