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Liability vs. Full Coverage Auto Insurance

When it comes to your vehicle, it may be a law to have it insured, but you also want to insure your vehicle in order to protect it, yourself and others in the event of an accident. Liability insurance is what is required by the state law as an insurance minimum while full coverage is merely optional in most cases. However, it is important to know the different between the two main types of insurance coverage to make certain that you have the type of coverage that you require and that fits your lifestyle.

Liability Only Insurance

Liability auto insurance is insurance coverage that will cover medical and property damages when driving your vehicle and you are deemed at fault. Most states have a state minimum of insurance for vehicle drivers to have on their vehicle.

As an example, minimum coverage is usually listed as three numbers similar to the following: 25/50/15. The numbers are not read as they are listed, but are instead read as thousands. The first number listed is 25 meaning $25,000 and this amount is for the total amount of medical bills for a single person. The second number is read as $50,000 and is the total amount spent on medical bills for every person involved in the accident. The third number is $15,000 and is the total amount to be used for any damage made to property as a result of the accident. If costs exceed these limits, you would be responsible for any additional costs.

If you notice, there wasn’t a number for your vehicle. This is because liability only auto insurance only covers other vehicles involved in an accident and not your own. You would be fully responsible for your own vehicle.

While liability is the only coverage that is required by law, you may find yourself in a bind with large hospital bills and property damage bills to pay should your insurance not pay for it all.

Full Coverage Insurance

Full coverage insurance is coverage that includes liability insurance. Full coverage consists of both collision and comprehensive car insurance. Should an accident occur, collision auto insurance will pay for the damages that your vehicle sustains. There is a deductible with collision insurance and this deductible will be required to be paid prior to any damage being paid for by the insurance company.

Comprehensive car insurance will cover damage that occurs from weather, vandalism, broken glass as well as auto theft. If opted for, towing fees, rental car fees, extra medical protection as well as uninsured motorist coverage are also often covered under comprehensive insurance. This requires a separate deductible from the collision and would also need to be paid for prior to the insurance company paying for any damages that were incurred.

Keep in mind that full coverage insurance, meaning both collision and comprehensive insurance, is usually required if there is a lien holder on your vehicle, which means you are still paying for it.

You can see above the differences between liability only and full coverage auto insurance. The choice is ultimately yours on which type of coverage that you select for your vehicle, but you need to make certain that it covers the most important aspects.