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Liability insurance is required by law. You might choose to drop optional physical damage (Collision/Comprehensive) coverage if the car's market value is low and repairs would exceed its value.

Compare quotes via EasyCarQuotes. Ask about discounts (multi-car, driver education). Increase deductibles on optional coverages. Maintain a clean driving record and good credit score.

Penalties can include fines. You would also be personally responsible for all damages and injuries if you cause an accident.

Generally yes, if they have your permission (explicit or reasonably implied), they are likely covered under your policy. Check your specific policy details.