What is Basic Car Insurance?

I have a theory about buying a car. I never purchase a car for more than about $2,000 so that if something happens to it, I can then just go out and replace it. It doesn't matter if I am living in my less than well off years or during my better off years, I just don't like to spend a lot of money on cars. No sweat. Of course, the first time I had to purchase my own car insurance, I didn't really understand quite what I was doing and ended up with liability and collision on a car that I paid less than $1,000 for. It wasn't until someone explained to me that all I needed was basic car insurance did I end up seeking much more reasonable car insurance payments.

So, what is basic car insurance? Basic car insurance means that you are simply covering your behavior behind the wheel. Also known as liability insurance, basic car insurance covers the individual that you hit in the event of an accident. What it does not cover is the damage you do to your car. So if you are involved in a two car accident and the other party has damage, your car insurance will kick in and once you pass a deductable, you are not held responsible for the damage to the other car. You are not, however, compensated for the now worthless front end that is sitting where your passenger seat used to be.

If you are only carrying basic car insurance, you are also not covered in the event of a single car accident, like when you forget that there is a curve in the road and you find yourself suddenly staring at the back end of the tree you just tried to knock down. In fact, you can almost be guaranteed that you will have no insurance coverage whatsoever for an accident like that.

Most basic car insurance policies are required by law to carry a minimum personal injury amount. Usually, this figure reaches about $5,000 per person per incident. That means for every person in any car accident involving your car, each person is entitled to $5,000 worth of treatment. Some states require higher amounts even on the basic car insurance because you can easily run through $5,000 in the emergency room.

If you purchase your basic car insurance policy online or through a discounted service, you can usually put together a basic car insurance policy in a matter of minutes either online or on the phone that offers you the exact coverage you need without carrying coverage that is most likely going to be worthless to you.