Difference Between Liability and Full Coverage
What is Liability-Only?
Liability-only coverage means coverage that only pays for the loss others incur if you are at fault in an automobile accident. These are for the medical expenses, other property damage or car repairs that you cause to another or their property in an accident.
One has the option of paying for more than the state minimum requirements outlined above for liability insurance. That is a good idea because you will be personally liable from your own finances and assets if you harm someone else or their property in an accident and your state minimum coverage levels do not fully reimburse the losses of the other party.
Why You May Want Full Coverage Car Insurance
Full coverage means that you not only have adequate insurance to cover the losses of others if you are at fault in an accident. Full coverage means you have all the liability coverage you need to care for the harm to others if you have an accident and are at fault, and you have coverage for your own losses as well. There are two main kinds of other coverages that drivers purchase in order to repair their vehicles in the event of an accident they cause:
What is Collision Coverage?
Collision insurance covers the cost of repairing your own car if you are in an accident that is your fault. A way to save money on collision insurance is to purchase it with a higher deductible. For example, it will likely be very expensive to have collision coverage on your vehicle with a $500 deductible, but a $1,500 deductible or a $2,000 deductible will save considerable money on your automobile full coverage policy.
What is Comprehensive Coverage?
Comprehensive insurance covers the cost of repairing your vehicle for those things that were not your fault, like extreme weather that damaged your vehicle, or a deer that walked in front of you, theft, or vandalism. Comprehensive insurance tends to be much cheaper than collision. Even those with older vehicles may benefit from carrying comprehensive insurance because it is relatively cheap and will cover things like windshield replacement.
What is the Difference Between the Two Types of Car Insurance?
So, liability-only insurance coverage will pay for what you did to the neighbor’s bumper when you backed into it while rushing to work. It will pay for the hospital visit by a bicyclist you hit who has a broken leg. Liability-only only insurance will pay for the utility panel you hit at the RV resort when you had trouble backing in.
Collision will pay for any damage you did to your own vehicle when you backed into that utility panel at the RV resort. Comprehensive will pay for the damage your vehicle suffered when a tree fell on it in intense rains that weakened the soil.
The difference between liability and full coverage insurance policies is that liability only covers other people and their vehicle if an accident should occur where you are at fault, but, with a full coverage insurance plan, you and your vehicle would also be covered along with other’s and their vehicle as well.
Another difference between the two is that a deductible is associated with full-coverage insurance, but not with liability. There is also a difference in price, where full coverage will cost more than liability insurance.
