Full Coverage Auto Insurance Vs. Liability Coverage

 

Comparing and contrasting full coverage auto insurance versus liability coverage can be a good way of understanding what type of auto policy is suitable for your needs. If you are a first timer who has just bought a new car, try visiting an insurance firm. You will be plastered with a plethora of limits and covers, packages and options which is sure to leave you confused. So prepare yourself in advance. Here’s a little guide which will differentiate between cheap full coverage auto insurance and liability coverage.

Full Coverage Auto Insurance

To the layman, “full coverage” auto insurance would imply an insurance policy which protects one’s assets against all types of damages. People who do not have any knowledge about this would think that no matter what happened to their cars or themselves in the event of any kind of mishap, they will be fully reimbursed by the insurance company. This is a misconception which needs to be cleared. There is no insurance policy in the world which covers everything. There are limits on the coverage. You have to choose ‘x’ amount to be covered (this is what decides the premium you pay) and your insurer will not cover you beyond that.

Secondly, deductibles included in the plan have to be covered by the driver. In addition to this, there are certain specified events which are not included in a full coverage auto insurance plan such as deliberate body damage to the vehicle.

Full coverage auto insurance however, covers you and your car against any damage that occurs due to collision accidents. However, there are limits – don’t expect to get a full cover if you completely total someone’s Ferrari. Such a policy also gives comprehensive coverage – it protects your assets in the event that your car gets stolen or vandalized, or is smashed to pieces in a natural disaster. A good idea if you live in New Orleans.

There may be additional endorsements such as roadside assistance or towing coverage but those are not vital in a full coverage auto insurance policy and depend from company to company.

Liability Coverage

All American states require you have to some form of auto insurance which protects the other party in case you are at fault in a car accident. This is known as liability coverage and varies from state to state. Having the state minimum is mandatory. Keep in mind that this only covers the other person’s injuries and car damages and not your own. Most drivers across the country opt for a liability coverage that is more than the state minimum as it is comparatively inexpensive.

So what makes for a strong insurance policy – Liability or full insurance coverage?

Depending upon your needs, the vehicle you drive and your past record, an insurance policy with only liability coverage can be useful if you are willing to foot the bill in the event of personal injury. In any case, a policy which has all three – comprehensive, collision and liability coverage is usually enough and suffices for most people. If you want a more customised plan and are willing to part with a little more, you can always ask the insurance company to suggest more options. They will be more than willing to help you with a full coverage insurance policy that is cheap and beneficial.