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Full-Coverage vs. Liability-Only: Which Insurance Policy is Best for You

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Having your vehicle insured is a must, not only because it is the law, but also because it protects you and others should an accident occur. Carrying liability insurance coverage on your vehicle is the minimum insurance required by law, with full coverage being optional.

Do you know the difference between the two?

Liability insurance

Laws requiring all passenger vehicles to carry liability insurance makes the road better for all of us. Liability insurance is coverage that will cover you if any injuries or damages to property occur during an accident.

The three different sections covered by liability insurance are:

1. Coverage limit per accident for bodily injury per person

2. Coverage limit maximum for all injuries sustained by all people per accident

3. Maximum limit for property damage coverage per accident

Each state has its own minimum limits of liability which drivers must purchase, but sometimes it may not be enough. That is why many people will sometimes purchase more than the required limits of liability insurance for peace of mind.

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Hospital bills and property damage can add up very quickly and if you don't have adequate coverage, you may end up with big bills that you personally have to pay, even after the insurance company has done their part.

Full-coverage insurance

Full-coverage insurance includes liability insurance, but also includes collision coverage and comprehensive coverage. Comprehensive coverage will protect you when anything happens to your vehicle from no wrong doing or fault of your own.

For example, if a tree were to fall on your parked car you would be covered. If hail damaged your vehicle, you would be covered. Fires, theft, and other things like this would be covered by your comprehensive coverage.

Collision coverage protects your vehicle should you get involved in an accident. This type of insurance is usually required by finance companies if you are still paying off your vehicle because it protects the finance company. If you were to become involved in an auto accident and your vehicle was totaled, your insurance company would pay off your car loan to the finance company.

 
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