When “Only Pay for What You Need” May Be Wrong

Once upon a time, Judy buys a cheap car for her teenage son Sam who is living at home while attending college. Judy puts a few thousand more into the car to make it safe for Sam to drive. Like any parent, she wants to protect her son.  

When it comes time to pay for auto insurance for the car, Judy wants to save a few dollars. She recalls the advice on TV to “only pay for what you need,” which she takes to mean she only needs liability insurance for this cheap car. Like many people, she thinks why get “full coverage?” She feels good she only paid for what she needs. 

And for weeks afterwards, Sam drives the cheap car to and from college classes. The car runs well. Sam is a safe driver and never breaks the rules of the road.

But, one day, Sam is heading home from school. A driver coming in the opposite direction suddenly turns left in front of Sam. BOOM! Sam did not cause the crash. But, he is badly injured and is rushed to the hospital by ambulance, where he is admitted for a week of assessment and treatment. Sam’s car is totaled. As it turns out, like too many drivers on the road, this driver had no auto insurance.

Sadly, without collision coverage and uninsured motorist coverage, Judy and Sam are now deeply in debt. There are no monies to replace Sam’s car. And, Sam has to drop out of college and go to work to pay the medical bill deductibles and balances not covered by his college health insurance. By only buying liability coverage for Sam’s cheap car, Judy thought she was only paying for what she needed. But, she was wrong.  

The point of this story is to ALWAYS get collision and uninsured motorist coverage no matter how cheap your car because these coverages protect YOU, or your loved one, from possible financial ruin.