What is the difference between liability and full coverage?
When it comes to auto insurance, understanding the differences between liability and full coverage is crucial for making informed decisions about your coverage needs. Both types of insurance provide financial protection in the event of an accident, but they differ significantly in terms of what they cover and how much they cost.
Liability Insurance
Liability insurance is a type of auto insurance that is required in most states. It covers damages and injuries that you may cause to others in an accident. This means that if you are found at fault for a collision, your liability insurance will pay for the medical expenses, property damage, and other costs incurred by the other party. Liability insurance is typically split into two categories: bodily injury liability and property damage liability.
Bodily Injury Liability
Bodily injury liability covers the medical expenses, lost wages, and other damages resulting from injuries sustained by the other party in an accident. The amount of coverage you choose will depend on the state’s minimum requirements and your personal needs. For example, if you opt for $50,000 in bodily injury liability coverage per person and $100,000 per accident, your insurance will cover up to $50,000 for each injured person and up to $100,000 for all injured parties in a single accident.
Property Damage Liability
Property damage liability covers the costs of repairing or replacing the other party’s property that is damaged in an accident. This can include vehicles, buildings, and other personal property. Similar to bodily injury liability, the amount of coverage you choose will depend on your state’s requirements and your personal needs.
Full Coverage Insurance
Full coverage insurance, also known as comprehensive and collision insurance, provides more extensive protection than liability insurance. It covers damages to your vehicle caused by accidents, as well as damages caused by non-collision events, such as theft, vandalism, and natural disasters.
Comprehensive Insurance
Comprehensive insurance covers damages to your vehicle caused by events other than collisions. This can include theft, vandalism, natural disasters, and hitting an animal. Comprehensive insurance is not required by law but can be a wise investment, especially if your vehicle is new or valuable.
Collision Insurance
Collision insurance covers damages to your vehicle caused by collisions with other vehicles or objects, such as trees or guardrails. It is also not required by law but is essential if you want to protect your vehicle from the costs of repairs or replacement in the event of an accident.
Conclusion
In conclusion, the main difference between liability and full coverage insurance lies in the scope of protection they offer. Liability insurance covers damages and injuries you cause to others, while full coverage insurance covers damages to your vehicle, whether caused by collisions or non-collision events. Understanding these differences can help you choose the right insurance coverage to meet your needs and budget.
