If this is your first time shopping around for insurance or you are looking to upgrade your current policy, you might have come across a lot of confusing terms and conditions that can make it feel like you are going through a maze.
One of those things is whether you want to get liability coverage or comprehensive coverage for your vehicle. Many drivers struggle to figure out what option works for them. But it doesn’t have to be that way.
To give you an idea, here are some differences between liability and full coverage auto insurance to help you make informed decisions when it comes to protecting yourself and your vehicle on the road.
1. Coverage Scope: Liability vs. Full Coverage
Think of liability insurance as the bare minimum required to legally drive in most states. If you are looking to just comply with the laws, then this is it. A liability policy typically covers damage or injuries you cause to others in an accident.
Basically, it will protect you from having to pay for repairs to the other driver’s car or medical bills for the passengers in the other car in the event that you caused the accident.
On the other hand, full auto insurance coverage goes the extra mile. In addition to giving you everything that liability coverage does, it includes protection for your vehicle. This means, the insurance company will help you cover the cost of repairing or replacing your car even if you caused the accident.
2. Cost Considerations
At this point, you are probably thinking that liability insurance tends to be more affordable than full coverage, and you are right. Since it only covers the damage you cause to others, you will find that the premiums are often lower.
Since full coverage insurance offers more comprehensive protection, it usually comes with a higher price tag. Paying extra does make sense if you consider the added coverage for your own vehicle.
3. Coverage Limits
When you look into liability insurance policies, you will find that they mostly come with predefined coverage limits. These limits tell you what your insurer will pay for the damages or injuries that result from an accident you caused.
When you get comprehensive or full coverage insurance, you can have more flexibility in choosing coverage limits for both liability and collision/comprehensive coverage. But, you should keep in mind that the higher limits do come with higher premiums.
4. Deductibles
Understanding insurance deductibles is very important no matter what type of a policy you are getting.
With liability insurance you typically don’t have any deductibles or they are very minor. Basically, you pay your premiums and your coverage kicks in when you cause an accident.
With full coverage insurance, things are a bit different. You will most likely have deductibles for collision and comprehensive coverage. If you are not already aware, a deductible is the amount you are responsible for paying out of pocket before your insurance kicks in to cover the rest.
So, before making a choice, make sure you can cover the deductibles.
