Insurance. Guarantee. Protection. These are things that we want to have when we’re talking about big investments like a house or a car. It’s only right to think that way, especially because these things are the fruits of our labor. After all, we toil in order to accumulate possessions that add value to our net worth.
We invest, we save, and we manage our finances.
But one thing that’s often overlooked is the fact that we, too, need to protect more than just our money: We need to protect our property.
There are many undeterminable variables and there are simply too many things that can go wrong without warning. While it’s nice to have safeguards against a wide variety of worst-case scenarios, we shouldn’t forget to consider ourselves in the process.
We love cars. It’s undeniable and to say otherwise is strange. Why would we have such bad traffic if that statement wasn’t true? The trouble here is that in our excitement to ride off toward the sunset, there are many details that are often glossed over.
The least appealing part of car ownership is dealing with car insurance, and choosing between full tort or limited tort coverage. What are the key differences between these two and are the cost-savings you get from a limited tort car insurance plan worth the risk?
Premiums
As you may have already guessed, limited tort car insurance policies cost significantly less than their full tort counterparts. Though, it’s also important to consider the depreciation of the value of your car. Newer and top-of-the-line models are going to have a higher premium regardless of what type of car insurance policy you’re getting.
Functional Coverage
Now, this is where things get more interesting. In case you find yourself in a car accident, you’re going to want to get a personal injury lawyer to help you with your insurance claim. The following illustrates the effects of having one or the other car insurance policy:
- Limited Tort. The claimant is entitled to claim reimbursement for any out-of-pocket expenses as a result of the accident. These expenses include car repair fees, medical bills, and legal fees. But that’s all they are entitled to claim.
- Full Tort. The claimant is entitled to the same things as limited tort car insurance policy holders. However, the main — and important — difference is that full tort insurance policy holders may also sue for damages even if they did not sustain any serious injuries.
- Special Cases for Limited Tort Insurance Holders. There are a few exceptions wherein those who have limited tort insurance may file for damages. This is only applicable when the victim has suffered serious injuries. The task at that point is to determine what can and cannot be considered a serious injury.
Cost Savings vs Risk
So, are the cost savings of limited tort insurance really worth the risk? For the frugal reader, it may be tempting to simply opt for the less expensive option, but there is one outstanding factor that determines whether these cost savings are worth the risk: your level of risk as a driver.
Low-risk drivers are most likely to benefit from a limited tort insurance policy because the chances of them figuring in an accident are low. Now, if you’re a high-risk driver, these initial cost savings may come back to haunt you later on, especially if you have an injury that arises long after the accident happens. The danger here is that you won’t be able to file for damages, and treatment for your newfound or chronic injury can quickly become a resource drain.
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