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

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Liability vs Full Coverage Car Insurance: How Much Car Insurance Do You Need?

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. There are two main forms of car insurance: liability car insurance and full coverage car insurance. Liability car insurance coverage on your vehicle is the minimum car insurance required by law, while full coverage car insurance is optional.

When it comes to liability vs full coverage car insurance, do you know the difference between the two? Just what is full coverage auto insurance, and what does liability insurance cover? Or maybe you’re wondering, “How much car insurance do I need?” Here are some answers.

Liability Car Insurance

Laws requiring all passenger vehicles to carry liability insurance make the road better for all of us. What does liability insurance cover? Liability insurance is a form of auto insurance coverage that pays the costs of any injuries or damages the other party receives in the event that you cause a collision.

Liability car insurance does not help you cover the costs you face for your injuries or vehicle if you cause a collision, and it does not help you if you are the victim of a collision caused by an uninsured driver. That is why the liability insurance cost is generally lower than the cost for full coverage car insurance, and it is important to keep in mind when considering getting liability vs full coverage car insurance.

What does liability insurance cover? 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 auto insurance that 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, though doing so means taking on a higher liability insurance cost. To keep your liability insurance cost as low as possible, be sure you fully understand the answers to the questions “How much car insurance do I need?” and “What does liability insurance cover?”

CHECK OUT: Find the Lowest Insurance Rates in Your ZIP Code

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

Full-coverage insurance

What is full coverage auto insurance? Full coverage insurance includes liability insurance as well as collision coverage and comprehensive coverage. Comprehensive coverage will protect you when anything happens to your vehicle from no wrongdoing 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.

Liability vs Full Coverage: What’s the Difference?

Considering whether to get liability vs full coverage auto insurance? Liability insurance only covers the cost for the damage you cause to others in an accident, which is why the liability insurance cost is usually lower. Full coverage car insurance protects other drivers from accidents caused by you but also protects you in the event of an accident, no matter who is at fault.