Full Coverage vs. Liability Only Car Insurance: Which one is for you? Author:    Posted under: Auto InsuranceAuto Insurance questions answeredAuto Insurance Types


For most drivers, finding the most appropriate auto insurance may seem like a daunting task. There is an abundance of car insurance companies with their competitive rates, not to mention the various kinds of auto insurance policies that are offered left and right. However, to help you narrow your search down, presented here are the two car insurance policies that are most commonly used. For an individual to make an informed decision, their differences, advantages and disadvantages have to be taken into consideration.

Liability Only Insurance

All states mandate that drivers have a specified amount of liability insurance. Make sure that the amount you purchase meets the required minimum in order for you to drive legally in your state of residence as the guidelines for the minimum vary from state to state.

What is covered?

Liability insurance covers only the damages and injuries done to another car, driver, any of his or her passengers, and property in an accident you have caused. This would include repairs to the other party’s vehicle, and medical expenses incurred for injuries to the other party. Often, it also includes damage to property inside the other person’s car.

This type of coverage is expressed in three in terms of numbers, each representing the components of the liability coverage. Normally, it is indicated as xx/yy/zz. ‘xx’ stands for the maximum amount your car insurance company will pay for coverage to bodily injuries suffered by a single person, per accident; ‘yy’ refers to the maximum amount your insurer will pay for all injuries in one accident; ‘zz’ is the total amount that your insurance company will pay for property damage.

Most insurance companies would recommend that one not only meet, but exceed, the liability coverage required by law to ensure that adequate coverage is available in case of an accident, especially if an individual is unable to shoulder huge out-of-pocket expenses.

Full Insurance Coverage

The term ‘full coverage’ is a misleading term. Although you have far more provisions available to you with this type of policy, it does not cover all circumstances as the term suggests. Full insurance includes two more types of coverage in addition to the basic liability insurance coverage. These are:

  • Collision coverage – covers your car against collision with any object or car, moving or otherwise. This basically covers you in an incident whether or not you are at-fault (unless you are intoxicated at the time of the accident). It is advisable to skip this type of coverage if you have a car that is old or in poor condition as it will likely not be worth the cost.
  • Comprehensive coverage – covers the damage caused by natural disasters such as flooding, hail or storms, and theft and vandalism. This type of insurance is designed to cover damage to your vehicle when you are not at-fault in the incident.

When it comes to full coverage, one can opt to obtain comprehensive without collision, but not collision without comprehensive. If your vehicle is under financing, your financing company will require you to carry full insurance coverage on your car.

While you may view car insurance as an unnecessary, often annoying expense, it is quite the contrary. Unforeseen circumstances can be met on the road, no matter how careful a driver one may be. In order to best save your money, you need to make sure you are not paying for more than what you need whether it is full coverage or liability only.

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