Total loss only car insurance (TLO)

The Disadvantages of the Total Loss Only Car Insurance - A total loss only car insurance (TLO) is a type of car insurance that will cover you if your car damage is at a certain value, usually around 75%. This requirement makes the insurance have several disadvantages compared to the other types of car insurances. Here is the disadvantage of the TLO insurance.

The Disadvantages of the Total Loss Only Car Insurance

It can be a waste of money

The insurance is made to cover your car from an extremely heavy damage, or if your car is lost. If this is the only car insurance you currently have, then it could be a waste of money. The monthly fee of the insurance will be useless, especially if the area where you live is secure and safe. The insurance is also won't give you protection from small scratches because, in order to make the insurance cover the damage, your car has to be damaged in a certain value. If you want to get back the monthly fee, it won't be returned 100% because the money will be used for many things according to the insurance company.

Going back and forth to fix the scratches

Continuing the problem mentioned on the first point where you can't get a fee to fix small scratches, the TLO car insurance will make you go to a service center more often. This is because the insurance won't cover for small scratches so you have to fix it in a service center and pay for it, which can be costly depending on the scratches or damage. Compared to the all-risk car insurance, the TLO insurance is no way near it. But, if you mix the all-risk and TLO car insurance, then you may get the maximum benefit so you have to pair a TLO car insurance with other types of car insurances.

If you lost your car, the insurance won't cover it 100%
It is true that the TLO car insurance will give you some money if your car is lost. But, the reality is that the insurance won't give you a 100% based on the value of your car. Let's say, the price of the car that you bought in 2017 is $20000. The TLO car insurance probably will pay for around 80%, more or less depending on the insurance company. This is because each year, the car's value will degrade in value.

The mentioned things above are the disadvantage of TLO car insurance. You should avoid using only TLO as your car insurance. To make a good use of the total loss only car insurance, you should pair it with other types of car insurances. You can pair it with all-risk car insurance, comprehensive coverage, or a liability coverage.