As you’re shopping for a policy, you may be unsure whether to choose liability and full coverage car insurance options can be daunting. Whether you're an experienced policyholder or a newbie when it comes to shopping for car insurance, it's crucial to understand the differences between these two types of coverage to make informed decisions that align with your needs and budget.
Liability and full coverage insurance serve distinct purposes, each offering benefits and limitations. Liability coverage provides essential protection for the other driver(s) involved in a collision, while full coverage offers a more comprehensive safeguard. This article will provide information on the differences between liability and full coverage auto insurance so you can make an informed decision when shopping for your policy.
What is liability insurance?
Liability insurance provides financial protection in the event you’re deemed at fault in an accident that causes injury or property damage to others. Liability insurance will help cover the other party’s medical bills, vehicle repairs, and legal fees. This type of coverage typically consists of two primary components:
Bodily Injury Liability: Bodily injury liability covers the medical expenses, rehabilitation costs, and potential legal fees associated with injuries sustained by the other party in an accident for which you're at fault. It’s important to note that bodily injury liability may also cover the expenses related to legal defense if you're sued as a result of the accident.
Property Damage Liability: Property damage liability covers the costs of repairing or replacing the other party's vehicle or any other property damaged in an accident where you're determined to be at fault. These costs can include expenses related to repairing vehicles, buildings, or other structures damaged in the accident.
State Requirements and Liability Coverage Limits
Each state in the U.S. has individual minimum requirements for liability coverage. These requirements usually define the minimum amount of liability coverage a driver must carry to legally drive in that state. Liability coverage limits are usually expressed in a three-number format, such as 25/50/20, where the first two numbers represent the bodily injury liability limits per person and accident, and the third number represents the property damage liability limit per accident.
A number expressed as 25/50/20 would indicate this state requires $25,000 of coverage for death or bodily injury to one person, $50,000 for the death or bodily injury of two or more people, and $20,000 to cover damage or destruction of property of others.
What is full coverage auto insurance?
Full coverage insurance is a term often used to describe a combination of coverages that offer more than a liability policy. While there isn’t a policy officially called “full coverage,” it typically refers to a comprehensive auto insurance policy that includes liability, collision, and comprehensive coverages, providing broader protection to you and your vehicle. A full coverage policy usually includes:
Liability Coverage: Similar to standalone liability insurance, full coverage auto insurance includes liability coverage to protect you financially if you’re responsible for causing an accident resulting in bodily injury or property damage to others.
Collision Coverage: This component of full coverage insurance covers the cost of repairing or replacing the insured vehicle if it's damaged in a collision with another vehicle or object, regardless of fault. Collision coverage is particularly valuable for protecting your vehicle in accidents where you’re at fault.
Comprehensive Coverage: Comprehensive coverage provides protection for damage to your vehicle that is not caused by a collision. This can include damage from theft, vandalism, natural disasters, falling objects, and collisions with animals. Comprehensive coverage offers a broad level of protection for a range of non-collision incidents.
While liability insurance is legally required in most states and provides essential protection, it's important to consider whether it offers enough coverage for your circumstances. In many instances, you may benefit from a more comprehensive, full-coverage auto insurance policy to ensure you’re financially protected from various circumstances.
Find the Auto Insurance Policy That’s Right for You with SelectQuote
Car insurance can provide a financial safety net if you find yourself in a collision. Whether you’re looking for a basic liability policy or need more comprehensive coverage, it’s important to review your options. Luckily, SelectQuote is here to help. In just minutes, our experienced, licensed insurance agents can compare rates from several of the nation’s leading carriers so you can easily decide which policy best suits your budget and lifestyle.
