Car insurance protects against financial losses in the event of an automobile accident. It is also required by law in most states. But did you know there are different types of policies? In this article, we’ll talk about full coverage vs. liability insurance. With liability coverage, only damages done to others are protected, while a full policy covers both your liability and damage to your own vehicle.
In 2021, full coverage cost about $1,997 a year, while liability car insurance was $720, on average. But the overall cost isn’t the only consideration. The requirements of one state may vary from another, while banks, auto lenders, and car dealerships may require you to purchase full coverage if leasing or financing your vehicle. However, you may have a choice in setting coverage limits that most suit you, especially if you own the car outright.
Assuming you have a choice, here’s a look at each type of coverage to help you make the best decision:
Liability Coverage VS. Full Coverage
How Does Full Coverage Insurance Work?
Insurance policies come in many forms. While it doesn’t necessarily have all the bells and whistles, full coverage includes liability, which usually incorporates Medpay, or medical payments coverage, or personal injury protection (PIP). Most states require motorists to have one or the other.
Full coverage also includes collision insurance, which covers damages to your car by another vehicle or object. The policy kicks in only if the damage occurs while you are driving. You’re insured, no matter who is at fault. Another component is comprehensive insurance, which pays for repairs related to damage from weather, theft, vandalism, falling objects, and other elements unrelated to a collision.
Collision and comprehensive insurance pay for the damage up to your vehicle’s cash value. This reflects a dollar amount after subtracting wear and tear and other depreciation costs from the original purchase price.
Full coverage may also include emergency roadside assistance, rental car reimbursement protection, and uninsured/underinsured motorist insurance. These provide coverage if you’ve been in an accident with someone who has no insurance or limited coverage.
Can I Get by with Just Liability Insurance?
A liability insurance policy covers someone else’s injuries and property damage in an accident, you cause and are liable for. In some states, it’s all you’re required to have by law. Liability policies include bodily injury coverage that pays medical bills and other costs, up to the policy limits. These pertain to the maximum amount paid per person injured, and the maximum amount paid for the entire accident. The total amount is usually double the per-person limit.
Property damage liability coverage pays for damage to other vehicles or property. If you are at fault for an accident, the policy will cover these. The policy limit is listed as a single dollar amount; this is the maximum payout of the policy per accident. But it does not cover damage to your vehicle.
This is the main downside of liability insurance. It will never cover your vehicle repair costs, medical bills, or other expenses after a car accident.
Should I Get Full Coverage or Liability Insurance?
Full coverage costs more, but it provides more protection. Your car may get damaged even if you’re a good driver. The policy provides a greater safety net, which is beneficial because your car can be damaged in many ways.
The value of your car is another consideration. Some people consider dropping full coverage if the premium is more than 10% of their vehicle’s overall value. Affordability is often a factor. However, dropping collision and comprehensive coverage means, if your car is damaged, you may have to pay to repair or replace it out of pocket.
Call The Law Offices of Jacob Emrani
If you have additional questions about full coverage vs. liability insurance, we can answer them and address any other concerns you may have. Our team has been dealing with insurance companies for quite some time. It can be difficult to recover the damages you deserve, but we use our legal expertise to build your claim and maximize compensation. We’ve recovered millions of dollars for clients over the years. To schedule your free consultation, call 888-952-2952 today.