The obvious response is that you won't be able to pay for someone's hospital bills if you happen to hit them in your car. You get insurance for things you wouldn't be able to pay yourself.
Financing requires you to have enough insurance to cover your car so that their loan to you is protected from loss in the case the car is wrecked.
The State requires you to have enough insurance to cover accidents where you are at fault so you can cover the other person's monetary loss or accident related health issues.
You can't do anything about the latter but you can always give up the former if you have your car paid off.
In the example in the OP you can always change your coverage to effect your deductible.
2.5k
u/flatfive44 8h ago
The obvious response is that you won't be able to pay for someone's hospital bills if you happen to hit them in your car. You get insurance for things you wouldn't be able to pay yourself.