At Mid Atlantic Insurance Financial, we know auto insurance can be expensive. The 80/20 rule is a type of insurance in Laurel, MD that only pays for damages to the other driver’s vehicle and property if you are found at fault in an accident, but it doesn’t pay for the damages to your car.
The 80/20 rule is so named because it requires drivers to carry insurance that covers only 80 percent of the value of their car. The remaining 20 percent would be paid out-of-pocket by the driver in the event of an accident. For example, let’s say you have a vehicle that is worth $10,000. Under the 80/20 rule, your insurance would cover $8,000 of damage to the other driver’s car. You will have to pay the remaining $2,000.
There are a few things to remember if considering the 80/20 rule for your car insurance. First, this type of coverage is not required in all states. It is only available in a handful of states, including Maryland.
And finally, it’s important to remember that 80/20 comes with some risks. Because you only carry liability coverage, you will be responsible for 100 percent of the costs to repair or replace your car if it is damaged in an accident. You could end up paying a lot later to save money now.
While the 80/20 rule can save you money on your monthly premium, weighing the risks and rewards before deciding if this type of coverage is right for you is important. If you are in Laural, MD, contact Mid Atlantic Insurance Financial to discuss whether this is a good option.