Liability Insurance vs Full Coverage

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When it comes to car insurance, the two most commonly discussed types of policies are liability insurance and full coverage. While both types offer protection for drivers and their vehicles, there are some significant differences between them that can impact the coverage you receive and the premiums you pay. In this article, we’ll take a closer look at liability insurance vs full coverage, so you can make an informed decision about which policy is right for you.

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What is Liability Insurance?

Liability insurance is the most basic type of car insurance, required by law in most states. It covers damages to other people and their property in the event of an accident you caused. This means that if you are at fault in an accident, and others are injured or their property is damaged, your liability insurance will pay for their losses, up to the limits of your policy.

Liability insurance is split into two types: bodily injury liability and property damage liability. Bodily injury liability covers the cost of medical bills, lost wages, and other damages to other people if you are at fault in an accident. Property damage liability covers the cost of repairs or replacement for any property damaged as a result of the accident, such as another car, a fence, or a building.

It’s important to note that liability insurance only covers damages caused by you, not damages to your own vehicle. To protect your own vehicle, you’ll need additional coverage, such as collision or comprehensive insurance.

Pros of Liability Insurance

– Lower premiums than full coverage

– Meets state minimum requirements

– Covers damages you cause to others

Cons of Liability Insurance

– Does not cover damages to your own vehicle

– Limited coverage amount

– May not cover all losses, such as medical bills or lost income

What is Full Coverage Insurance?

Full coverage insurance, also known as comprehensive and collision coverage, is an optional type of policy that covers damage to your own vehicle, as well as damages caused to others. In addition to liability coverage, full coverage policies include collision coverage, which pays for repairs or replacement of your car if it is damaged in a collision, and comprehensive coverage, which covers non-collision-related damage, such as theft, vandalism, or weather-related events.

Full coverage policies usually require a higher premium than liability insurance, and the cost will depend on factors such as your driving history, age, and the value of your car.

Pros of Full Coverage Insurance

– Covers damages to your own vehicle

– Provides more comprehensive protection

– Can include additional benefits, such as roadside assistance

Cons of Full Coverage Insurance

– More expensive than liability insurance

– Sometimes requires a higher deductible

– May include coverage you don’t need

FAQ

Question
Answer
Is liability insurance required by law?
Yes, liability insurance is required by law in most states.
Do I need full coverage insurance?
It depends on your situation. If you have a newer car or a car with a high value, full coverage insurance may be a wise investment. Otherwise, liability insurance may be sufficient.
Will liability insurance cover me if I am at fault in an accident?
Yes, liability insurance will cover damages to others if you are at fault in an accident.
What if the damage to my car is greater than the coverage limit?
If the cost of repairing or replacing your car exceeds the limit of your coverage, you will be responsible for paying the difference.
Can I change my coverage from liability to full coverage?
Yes, you can usually change your coverage at any time during your policy term, but it’s a good idea to consult with your insurance provider first to understand the implications for your premium and deductible.

Conclusion

Ultimately, the choice between liability insurance and full coverage insurance depends on your individual needs and budget. If you have a newer car or a car with a high value, and you want more comprehensive protection, full coverage insurance may be the better option. Otherwise, liability insurance should be sufficient for meeting state requirements and protecting you in the event of an accident. Whatever type of policy you choose, it’s important to shop around and compare quotes from different providers to ensure you’re getting the best coverage at the best price.

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