That's liability insurance, which is NOT the same as auto insurance.
Auto insurance consists of liability and usually physical damage coverages. It sounds like you might have the minimum liability limits for the state in which you live since you say you're willing to take a risk with your coverages.
Auto insurance, just like LTC, give you options on coverages. The liability coverages (excluding Uninsured Motorist coverages) under auto are third party coverages - they protect people and property you injure or damage. Medical payments and Personal Injury Protection provide coverage for the people in your car. You can chose the limits of coverage you want under MedPay and PIP just like you can chose the limits of coverage you want under LTC. MedPay, PIP, and LTC are optional.
In the case of MedPay and PIP, fault does not have to be determined.
This shifts over to risk. You don't have to carry any insurance at all unless you have property that has a lien or you work for a company that requires you drive your own car for work. You don't have to carry health insurance, life insurance, or LTC. By not doing so, you assume the risk of the costs for care. That's OK up to a point.
Let's say you chose not to carry any insurance at all and there is a situation that requires costly medical intervention as well as extended care. It makes no difference if it's an auto accident, a fall off your roof, a stroke - something significant that impacts your ability to provide income needed to support your family. So you drain your savings. There's no income. There's no insurance to cover the medical bills.
If you are personally assuming the risk, then that's OK. Unfortunately, the extended cost of your care could shift over to taxpayers at one point and for those of us doing what we feel is the right thing by carrying the appropriate insurance are now asked to take care of you because you wanted to assume the risk.
The flip side of this, with you wanting to assume risk, is if you are penniless and require extended care - you have high odds of getting the caretaker who may not have the appropriate skill level for your needs.
You need to balance the money you feel you're saving by reducing or eliminating coverages and insurance with the risk. Unfortunately, the vast majority of people understate their long-term risk and the cost to mitigate the loss.
In my case, the annual premium I pay for LTC is 2% of the annual cost of a nursing home. Plus I have coverage for in-home care as well as physical alterations to my home to allow me to continue to stay there with a caretaker
of my choice. There are some licensing things that have to be met; however, I have the final decision on my care.
Let's just call it a draw. There are several of you who are adamant you will never purchase long term care. There are several of us who have it as an integral part of our financial plan.
I also suspect those of us who have LTC also carry high liability limits on our auto and homeowner policies and probably also own an umbrella policy. Not that we have great risk that something will happen; we want to be prepared if and, more likely, when it happens.
We're fortunate we live in a place where we have choices. And that's fine as long as the final result for your decision to reduce or eliminate insurance does not impact the rest of us.
