When you want to purchase an auto insurance policy, you must understand the different types of coverage. Plus, depending on your situation, you need to find out how much protection you actually need. In this regard, the first decision you will make is choosing between liability vs full coverage auto insurance. To help you out, in this article, we will explain both policies.
The first thing you need to understand is that liability coverage will cover the cost when you cause an accident. This could mean reparations of other vehicles or medical expenses of people that get injured. Full coverage is a combination of different policies that offer the best protection for your car.
Keep in mind that you need to have at least the minimum coverage required by the law. Otherwise, if something happens while you are driving, you could end up drowning in debt. We understand that there are some auto insurance premiums that can be expensive. But, if you do your research, you’ll find that there are companies such as Surex where you can find affordable coverage. This means there is no excuse for having an uninsured vehicle.
To pick your perfect policy, here is everything you need to know.
Auto Insurance: Liability vs Full Coverage
As we explained before, liability coverage will pay for all the damages and injuries caused due to an accident. However, this will only protect others. If you want your insurance to cover your car and medical expenses, you’ll have to purchase additional policies. This coverage is made up of the following elements.
Bodily Injured Liability
This is the part of the policy that will take care of all the costs of other person’s injuries, in case you are found responsible for the accident. In regards to bodily injury liability, there are two amounts you need to keep in mind the coverage per person and accident. Usually, the latter protections doubles the first one. That means that if you have a $10,000 coverage per person, the total protection per accident will be $20,000.
Property Damage Liability
In case you cause an accident, the property damage liability will cover all the costs regarding the reparations or replacements of someone else’s property. For this protection, you’ll only have one determined amount per accident. But, this would not include your car. In other words, you will have to pay out of your pocket in case your vehicle needs any repairs.
Liability Coverage is the only policy required by the law. However, depending on where you live, you might have to purchase extra coverage. That’s why many people prefer auto insurance full coverage vs liability.
What are the liability coverage limits?
Once you purchase liability coverage, you’ll need to determine the three amounts we mentioned in the last section (bodily injury liability per person, bodily injury liability per accident and property damage liability). All these limits will represent what the insurance company will have to pay in case of an accident.
Keep in mind that there is a minimum amount you are required to have. But, if you want to have proper protection, the best thing you can do is talking to your insurance agent.
When choosing auto insurance full coverage vs liability, take into account that no insurance company offers a “full coverage” policy. Instead, when we talk about full coverage we refer to several policies that offer you the best possible protection. Depending on what you need, you can purchase several policies. But, in general, full coverage includes liability, collision and comprehensive insurance.
This will cover your vehicle in case it gets damaged in a collision, whether it is your fault or not. Collision coverage is a protection that is not offered on its own. However, you can get it when purchasing comprehensive insurance.
This policy will cover all the costs in case your car gets damaged in a noncollision incident. For instance, if your property needs reparations due to vandalism, natural disasters, theft or falling objects.
The limit of collision and comprehensive insurance will go up to the actual cash value of your property. That means the insurance company will take the market value of your vehicle and subtract the depreciation costs.
It is common, that drivers who want full coverage, purchase a policy to cover their medical expenses. This means that in case they have an accident, the insurance company will pay for all the medical bills of the driver and passengers.
The most important difference between liability vs full coverage auto insurance is that the latter is not required by the law. However, this only applies if your car is not on lease and if you have paid your auto loan.
Auto insurance liability vs. full coverage: which one is better?
When choosing liability vs full coverage auto insurance, there are several factors you should consider. First liability coverage is included in a full-coverage plan. That means you need to figure out if, in your case, combining policies is the best option. We will advise you to purchase full coverage only in case the value of your vehicle exceeds the cost of the full policy.
If you just bought your first car, we will recommend purchasing full coverage. Even though it is not mandatory, this policy will make sure your vehicle is covered in case of an accident. That means you won’t have to worry about spending your hard-earned money paying for repairs or medical expenses.
In case full coverage gets too expensive for you, you have the option to only pay for liability insurance. But, you might want to add at least one extra protection. That way, you can also protect your property. Overall, picking between auto insurance liability vs full coverage will depend on your particular situation.
Keep in mind that there is no excuse for driving uninsured since there are several ways in which you can get a cheap policy that still gives you proper coverage. In case you have any questions about how much coverage you should get, you can contact your insurance agent.