Liability vs. Full Coverage Auto Insurance: What's the Difference?


When you begin searching for automobile insurance quotes you're going to hear a lot of new terminology. Some of the most commonly used phrases include "liability" and "full coverage" and it is important for you to know the differences between these two types of coverage before you begin requesting quotes. So what are the differences between liability vs. full coverage auto insurance? Let's find out.

Understanding Liability Coverage

Liability coverage is coverage you are legally required to have in most states in order to pay for bodily injury or property damage that occurs as a result of an accident you caused. Some states combine the liability coverage into one limit while others require you carry separate limits for bodily injury liability and property damage liability.

You'll also be required, in most states, to carry personal injury protection, or PIP. This coverage pays for your medical bills in the event you are in an accident usually without regard to fault.

Some states, but not all, require you to carry uninsured and/or underinsured motorist coverage as well. This coverage would protect you if you were in an accident caused by a driver who did not have any or enough insurance coverage. These are the only coverage options most states require by law.

Full Coverage Auto Insurance

The next step in understanding the difference between liability vs. full coverage auto insurance is to uncover the coverage options afforded under a full coverage policy. In short, a full coverage auto insurance policy will include both state mandated liability limits as well as property damage coverage for your own vehicle.

Property damage for your own vehicle comes in the form of comprehensive and collision coverage. Comprehensive coverage pays for damage to your vehicle if it is stolen, vandalized, or damaged due to an "act of God" (including run-ins with animals). Collision coverage pays for damage to your vehicle caused by just that a collision.

These coverage options are optional, usually include a deductible, and only apply if you are responsible for the damage to your own vehicle. If another party hits your car they'll be responsible for paying for the damage under their liability coverage sections. So - liability vs. full coverage auto insurance? It's up to you to determine if it is worth placing full coverage on your vehicle. If it's new you'll want to add full coverage (especially if it is financed or leased) but if it's old you'll have to compare the value of your car to the cost of full coverage. In the end, the choice is up to you!

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