Understanding Full Coverage vs. Liability Car Insurance
The bottom line is that more than likely you have to have automobile insurance but need to decide if liability is enough for you. There are many factors that can go into determining whether you should get full coverage or auto liability insurance. Some of it could depend on the age and condition of your car or even the state in which you live. Whatever the case may be, you will need to know about both liability auto insurance and full coverage to make the decision that best suits your car insurance needs.
State Minimums and Other Deciding Factors
The type of car insurance you get isn’t always determined by you the driver, and therefore in some cases liability car insurance isn’t enough to cover it. At the very least almost every state in the county requires a minimal amount of liability auto insurance. In fact the only state in the country that has not made it mandatory to carry at least liability insurance to be able to drive your car legally is New Hampshire.
If you are financing a car, especially a new car, you will need to have full coverage. If you already own your car, the choice is more or less up to you and could probably be best determined based on the value and condition of your car. If you have a financed car, however, the lender wants to be assured the full value of the car will be recouped in a circumstance where there is a wreck and the car is totaled out.
Some Other Things to Know
First you will need to know the two basic types of full coverage insurance to get a better understanding:
Collision insurance – This covers the car if you collide with another vehicle and, depending on your policy, collisions involving other objects including those that are private or public property. In some states collision is the minimum requirement instead of just liability car insurance even if you are not financing a vehicle.
Comprehensive insurance – This type of insurance generally covers things that cause damage to your car aside from a collision such as storm damage, theft or an act of God. Again some states require this to be able to drive legally even if you are not operating a financed vehicle.
The state minimum requirements for liability auto insurance are offered in a three part system. The three parts may appear like this 20/45/20 and are determined by your states minimum requirements and your policy’s maximum payout. The three parts are:
- This is the amount of personal injury per person per collision included in your auto liability insurance policy and in this example would be $20,000.
- This is the amount of personal injury total to be covered per accident and as demonstrated here would be $45,000.
- This is the total amount of property damage covered per accident and would be the amount of $20,000.
How This Relates to No Fault States
There are no fault states in which the no fault car insurance you carry means both drivers and their passengers are covered by the driver’s own insurance regardless of who is at fault. This helps prevent too many lawsuits over damages and medical expenses. Compared to liability car insurance, this is a much safer route to go.
If the accident you are at fault in exceeds the amounts your insurance provider will cover for personal injury or property damage, the remaining balance is yours to pay. In other words, if you injure another person who has hospital bills of $100,000 and you only have your state minimum of $20,000, the remaining $80,000 is yours to cover from out of your pocket.
Deciding Between Liability Car Insurance and Full Coverage
If the choice is actually yours to make about whether to get liability auto insurance or a full coverage policy you have several things to think about. Keep these things in mind when making your choice:
- You still must meet the state requirements based upon where you live in the country. If you finance a new car, are getting your first auto insurance policy ever or have relocated to another state, make sure you understand exactly what your state requires.
- The value of your car can help you decide. If your car is older or needs work, then what you pay per month for full coverage may end up being more than what you would get for its value should the car be totaled out in a wreck.
By providing your zip code, you can get free liability car insurance and other types of quotes today from providers who want to compete for your business.
What is Liability Auto Insurance?
When it comes to understanding your car insurance needs, it is important to comprehend terms such as liability auto insurance. Many people sign up for car insurance just to get the minimal amount of coverage in place so they have a policy. While this may prevent you from getting a traffic violation citation, it may not end up being what you need for your individual situation.
By not getting the insurance that you need or settling for less to save a few dollars, you can end up spending a lot more money down the road. If you ever have to cover your own repair or medical bills out of pocket due to an automobile accident, you will find yourself financially exhausted.
Some Things You Should Know about Liability Auto Insurance
To get a better idea of what this type of insurance is, here are some points you should be aware of:
- In most cases, liability auto insurance covers bodily injury and property damage.
- This type of auto insurance is required in every state to drive legally.
- The state determines what the minimum amount of required coverage is.
- Liability auto insurance covers you against damage or injury you may cause to another car or driver.
- Most drivers should have a greater amount of liability insurance coverage than they have.
What Does It All Mean?
First of all, liability insurance generally includes three main factors:
- Bodily injury for each person
Bodily injury is the part of the liability auto insurance that covers injury you may cause to others during a car accident. This alone, without coverage, can add up to astronomical amounts of money that could devastate you financially should you have to pay for any of this out of your own pocket.
- Bodily injury for each accident
The bodily injury part of the policy can include coverage for things including emergency roadside medical care, hospitalization, loss of income and, in severe incidents, the coverage of funeral expenses. This also helps cover any legal fees you may incur or bail bonds for you or anyone on the policy.
- Property damage
Property damage is another issue that can add up to more money than you could possibly afford on your own. It can be something as simple as replacement cost for a mailbox, but only goes up from there. It covers the costs of repair or replacement of the other vehicle involved in the collision as well as damage to structures such as homes or businesses. Any damage to any sort of stationary object damaged or destroyed by an accident in which you are at fault would be covered, in most cases.
** Keep in mind: even having a great amount of coverage doesn’t matter, though, if you should break regulations specified in the policy. For instance, if you cause an accident due to illegal behavior, such as driving under the influence of drugs or alcohol, your policy may reserve the right to refuse liability.
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