The Difference Between Liability and Full Coverage Car Insurance
There are many types of car insurance policies available in the USA. If you want to ensure you’re protected on all fronts, it is necessary to first decide which policy is the right choice. Understanding the difference between liability and full coverage in car insurance will help you make the best decision for you. Read on to learn more.
Liability insurance policy
The liability car insurance policy is a cover that includes any injury or damages that your car causes to another person. This cover does not extend to any damages of your vehicle or a personal injury. In most USA states, you must buy liability coverage for the car. When your car meets with an accident, you are liable to pay for any injury or damages to a third-party. This insurance policy covers the costs. It has two components: Property damage and bodily injury coverage.
If your vehicle is in an accident, resulting in damage to another person’s property or car, you are lawfully responsible for paying the expenses. If you have the property damage coverage, it takes care of the cost. Hence, even if your state does not mandate buying the policy, it is worth buying.
If you are in an accident causing injury to another person, the bodily injury coverage takes care of the expenses. It comes with coverage limits such as:
- Highest payable coverage for the whole accident
- Highest payable coverage for the injured person
Full coverage policy
The main difference between liability and full coverage in car insurance is that the latter offers additional benefits. Full coverage car insurance policy is a comprehensive plan that provides both liability and collision coverage. The collision coverage is financial aid for any damages to your car due to an accident. Whether you are at fault for the accident or not, the collision coverage will pay expenses for the damages to your car.
The full coverage offers a comprehensive car insurance plan that pays for non-collision related damages, including theft, vandalism, natural calamities, falling objects, weather, and more. The highest amount of cover you can get in case of collision and non-collision related damages depends on the car’s cash value. It is the vehicle’s worth after deducting the depreciation costs from the actual price of the car.
Is liability coverage enough?
Purchasing liability coverage is enough when you are only concerned about the law. However, it is vital to remember that the policy offers limited coverage. Buying a comprehensive cover ensures that you are financially protected against most types of damage to the car. In case of an accident, the collision and comprehensive coverages will help you repair your vehicle without having to pay from your pocket.
Now that you understand the difference between liability and full coverage in car insurance, it will be easier to choose the best policy for the vehicle.