With the never-ending economic crisis, insurance vendors together with State Departments of Insurance are constantly searching for ways to offer affordable insurance packages. Everybody has to be able to pay for the coverage necessary to operate a vehicle in the United States without breaking the bank. The mandatory liability insurance is a good example of such a policy – most car owners can afford it, and the roads are a safer place to drive.
The latest attempt to come with cheap insurance catered on a certain segment of US drivers is the limited use auto insurance. It’s the most bare-bone package that offers the basic liability insurance for only one vehicle and one driver. Here are the main characteristics of the restricted auto insurance.
One car, one driver
It doesn’t work for your friends or other members of your household. While the Liability insurance covers the car with as many drivers as you want, if you lend your car and the driver causes an accident the insurer will deny the claim. Therefore, it will only suit you if you live alone and/or know no one else will use your car.
More cars, one driver
If you have more than one vehicle and you are the only driver, you may, again, consider a limited use insurance policy. The most frequent scenario is with one driver who has a fully insured automobile for daily use and one or more for occasional rides. You might, for instance, own a sports car that you only take for a spin on weekends or a family van for vacations.
Perfect if you don’t drive frequently
Some prime candidates for this policy include people who live in large metropolitan areas who frequently use public transportation. If you drive your car every once in a while you will find that a restricted insurance policy suits you best – you will pay less and still get the coverage you need. If you ride a bike to work or school then you will be saving both in terms of gas and auto insurance.
Safely kept vehicles
You should have a safe place to store the vehicles you don’t drive frequently if you want to apply for restricted insurance. If you leave your car on the street for days or weeks, the insurer might consider it is prone to being vandalized or overly exposed to weather conditions. If you store your car in a garage or at least in some closed area – like your own yard – you may ask for a discount from your insurer.
Better yet, take some additional safety measures to store your car. Place a jack stand under the car to relieve pressure off the tires, use a quality auto cover and check the inside periodically for rodents or fungus.
One of the main criteria you will have to follow is the maximum yearly mileage the car can be run. Most insurance providers will set the threshold at 2,500 or 5,000 miles a year and, if you go over it you won’t be able to renew the policy next year.