Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Oct 15, 2020

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Here's what you need to know...

  • Liability coverage does not pay for medical expenses
  • Collision coverage will pay for any repairs your vehicle sustains in an accident
  • Full coverage encompasses comprehensive, collision, and liability

When buying auto insurance, you have many different types of policies that you could potentially choose. Many people in this situation choose between full coverage and liability-only car insurance policies.

While both of these policies do provide some protection, the scope of protection that they offer varies greatly.

Before opting for liability car insurance, you may want to take into consideration what you are giving up by passing on full coverage.

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Table of Contents

Liability-Only Coverage

Liability car insurance coverage is the minimum type of coverage that is required by law in order to drive a vehicle on the public roads.

This type of coverage ensures that any damage you cause while driving a vehicle is paid for.

A typical liability insurance policy provides coverage for medical bills for people that are injured while you are driving and for damage to property.

For example, if you cause a wreck, your liability insurance coverage could pay for the damage to the other driver’s car as well as for the driver’s medical bills.

When buying liability insurance coverage, the policy is typically quoted with a series of three numbers.

For instance, the policy may state that you have 50/100/50 coverage.

The first number means that you have $50,000 in personal injury coverage per person. The second number tells you that your policy offers a maximum of $100,000 in personal injury coverage per incident.

The third number means that you have $50,000 in personal property damage coverage.

Each state has its own minimum car insurance coverage limits for each of these three areas.

When buying an auto insurance policy, you will least have to get the minimum amount of coverage for your state.

In most cases, it makes financial sense to go ahead and get a policy with coverage that is higher than these minimum amounts.

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Full Coverage

“Full coverage” is a general term that does not represent a specific type of policy on the insurance industry. Typically when someone refers to “full coverage” they mean that they want a policy that has liability, collision, and comprehensive coverage options.

There is not a policy that could pay for every possible contingency, so the term “full coverage” is a bit of a misnomer.

When people want to add full coverage to their policies, they typically want to add on collision and comprehensive car insurance.

Collision is the part of the insurance policy that pays for the damage to your own vehicle when you cause an accident.

For example, if you pull out in front of someone and cause a wreck, your insurance company will pay to repair or replace your own vehicle.

The insurance company will pay for the damage up to the value of your vehicle before it was damaged. The value will be based on current market estimates that the insurance company has on your make and model.

Comprehensive coverage is the other important part of full coverage auto insurance.

Comprehensive provides a broad type of coverage for your vehicle. It pays for damage that is unrelated to a collision with another vehicle.

For instance, it may pay out when a large animal walks out in the middle of the road and you run into it. It also pays out as a result of a fire, vandalism, storm damage, and theft.

If your car is damaged in some way and you were not involved in a wreck with another car, this is the part of your policy that will most likely payout.

The deductible for the conference of coverage is typically lower than what your deductible is for a collision.

In most cases, a comprehensive claim is not your fault, so the amount that you have to pay for out of pocket is lower.

Other Coverage Options

As part of a full coverage auto insurance policy, you may have some additional areas of coverage.

One area that most policies have is underinsured or uninsured motorist coverage. This type of coverage ensures that you are paid even if someone hits you without their own auto insurance coverage.

Some policies also include a provision for your own medical bills.

If you are injured in a wreck, this part of your policy will pay for the medical bills associated with the incident.

This means that your personal health insurance would not have to cover the medical bills as long as your injuries were associated with a wreck.

Many auto insurance policies also include a provision for rental car coverage.

With this type of coverage, if your car is damaged in a wreck and must be repaired or replaced, the auto insurance company pays for a rental car for you to use.

The rental car coverage can last for several days or weeks while you are finding a replacement vehicle or waiting for repairs.

Choosing a Policy

When it comes to choosing a policy, you have to look at all of the various coverage options that it provides before making a decision. It is typically in your best interest to get quotes from multiple insurance companies before selecting a policy.

When getting quotes, you need to make sure that you are comparing apples to apples.

You can’t accurately compare a liability insurance policy from one company against a full coverage policy from another.

Once you are sure that you are comparing the same policies, you can then make an educated decision based on the reputation of the company and the premium rates.

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References:

  1. https://www.progressivecommercial.com/coverages/liability/
  2. https://www.allstate.com/tools-and-resources/car-insurance/property-damage-liability-insurance.aspx
  3. https://www.nationwide.com/auto-insurance-coverage.jsp
  4. https://www.statefarm.com/insurance/auto/coverage-options/comprehensive-coverage
  5. http://www.21st.com/auto-insurance-information/understanding-car-insurance-deductibles.htm
  6. https://www.esurance.com/info/car/uninsured-and-underinsured-coverage