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Liability vs. Full Coverage Auto Insurance

Comparing liability versus full coverage auto insurance is sometimes necessary for drivers to decide which way they want to go for their insurance protection. Some people think that liability and full coverage policies are the same thing. And others believe they are the opposite of one another. In actuality, liability car insurance can be a standalone policy, but is also a part of a full coverage plan. Drivers should understand what liability insurance covers. They should also be aware of the component parts of a full coverage plan, and the areas that each part handles. Having this type of understanding makes it much easier to make wise choices on insurance coverage when it comes time to sign up or renew.

Some people have had one type of policy or the other for many years and yet do not really even know what their coverage contains or exactly what they're paying for. Renewing your plan year after year without reviewing its contents to be sure they are still matched up appropriately to your needs is foolish and dangerous. Sharp consumers know where their money goes and they have a good understanding of the contents of their policy. Make sure to keep track of these things so that you don't waste money on coverage you don't need, and so that you will not be surprised in the event of a claim.

Liability Auto Insurance Explained

Liability is the one area of auto insurance that pretty much every driver must have. Some states require other areas of protection such as personal injury protection (PIP), but liability is a universal element in one form or another. In a very basic sense, liability protection takes care of your financial obligations if you get into an at fault accident. Those obligations may include paying for the medical expenses of an injured party, the property damage of someone you hit, or both.

Liability plans come with certain specified limits of coverage. Each state in its own auto insurance laws sets minimums for these limits, and many drivers do only carry that minimum coverage. But a large number of motorists in states all over the country buy more than what is required by the state. This coverage is relatively cheap, and it can save you big money if you get into an accident and you're held responsible for the crash,so it's important to conside the liability insurance price versus value if you're thinking of choosing this type of coverage.

Full Coverage Car Insurance

"Full coverage" is a bit of a misnomer because its name implies that it covers everything. This suggests to people who do not know any better that if they get into an accident or if anything happens to their cars, they will be fully covered. There are a few problems with this logic. First of all, there are always limits of coverage. No policy covers every expense. One of the financial limits is the elected coverage you choose. Insurers will not cover anything beyond that amount. And the other is the deductibles included in the plan. These are the driver's responsibility along with any excess charges beyond the limit.

And the second problem is the issue of exclusions. There are always specified events that will not be covered at all by a full coverage policy. An example could be intentional body damage done to a car by the owner. So we have to be careful in how we look at full coverage policies.

What a full coverage plan includes are liability, collision, and comprehensive insurance. There may be other endorsements like towing coverage, but these do not need to be present for a policy to be called a full coverage plan. Collision insurance covers the insured car against collision losses, and comprehensive handles non collision related losses. Again, in each of these two areas there are limits and exclusions to coverage. There is no such thing as a policy that covers everything. Even so, the combination of liability, collision, and comprehensive makes for a pretty strong policy.

Choosing Appropriate Automobile Insurance Coverage

Full coverage car insurance is extremely valuable in the right set of circumstances. But it is not always the right choice for every driver, especially when trying to buy cheap car insurance online. Some motorists are better advised taking the money they would be spending on collision and comprehensive and investing it in additional liability protection or setting it aside for a new car some time down the line.

Collision and comprehensive lose their value as vehicles depreciate, so they are normally not a good investment in older cars. But this is just a generality and certainly not a universal insurance truth. Drivers need to make wise choices on their auto insurance plans and make sure they tailor them to their needs and to the appropriateness of the situation. Full coverage and liability only car insurance policies each have their own place at certain times.


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