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November 15, 2021

When Should You Have “Full-Coverage” vs. Liability Car Insurance?

Shopping for car insurance can be a tricky process, especially if it is your first time. There are many considerations to make to determine which kind of coverage is the best fit for you. With so many choices, you must gather as much information as possible to make an intelligent decision and maximize your insurance. When choosing car insurance, one of the first decisions you must make is whether you need liability insurance or “full coverage,” but what’s the difference?

What Is Liability Insurance?

Auto liability insurance exists to help cover the cost of the other driver’s property or bodily injuries if you are at fault in an accident. Auto liability insurance consists of two types of coverage.

  • Property damage liability protection: Property damage liability protection applies to damages to the other party’s property due to the accident. Drivers typically use it to cover the other party’s vehicle repair or replacement costs, but it can also cover other property damaged in the accident, such as fences and phone poles.
  • Bodily injury liability protection: Bodily injury liability applies to the other party’s medical expenses after an accident in which you are at fault. In some cases, this can even include lost wages or legal fees if the other driver files a lawsuit.

Your minimum amount of required liability coverage will vary based on your state. If you get involved in an accident and the costs exceed the minimum, you will likely be responsible for paying the extra out of pocket.

When deciding on auto liability coverage and how much, pay attention to coverage for injuries per person, total injury coverage and property damage per accident.

Liability car insurance is typically inexpensive. You make small monthly savings that can amount to significant annual savings if you experience an auto accident. Your insurance company will provide a lawyer if needed. If you are uninsured and get into an accident with another driver, you are responsible for paying for your damages and the other driver’s damages out of pocket. Depending on where you live, you may also be subject to fines or jail time if you lack insurance and get into an accident that results in the other party’s bodily injury or death.

What Is “Full Coverage” Car Insurance?

Contrary to what the name suggests, “full coverage” doesn’t cover you for anything and everything that might happen. For example, your policy may not cover your medical bills resulting from an accident. Typically, “full coverage” will cover the cost of damage to your car. There are two types.

  • Collision insurance: Collision insurance is primarily for damage done while driving. These include hitting an object, running your car off the road or colliding with another vehicle.
  • Comprehensive insurance: Comprehensive insurance covers vehicle damage caused outside driving. This policy accounts for situations such as foul weather, fire or theft.

Because “full coverage” applies to a broader range of incidents, it is often more expensive. 

  • Pros of “full-coverage” auto insurance: The insurance company will reimburse you for damage to your vehicle. “Full coverage” covers events outside your control, such as flooding and car theft. Even when you are at fault, your policy will protect your property. 
  • Upfront benefits: With some “full-coverage” car insurance policies, you get paid upfront for the repairs you need. In some cases, your insurance company will send the money directly to the repair shop, so you don’t have to worry about paying for the repair yourself.

Factors That Might Affect When You Should Have “Full Coverage” vs. Liability Insurance 

When deciding whether “full” or liability coverage is better for you, you should consider several other factors besides your driving history and how much insurance you need. 

  • Car’s age: Depreciation is arguably the most significant consideration. A brand-new vehicle begins depreciating as soon as you drive it off the lot, and will continue to do so as long as you own it. If you drive an older vehicle that gets damaged in an accident, insurance companies are likely to pay significantly less than what you initially paid for it. Think about your vehicle’s age, mileage and condition when deciding whether it’s cost effective to carry “full-coverage” insurance or not.
  • Whether you lease or finance: Though “full-coverage” insurance may be optional in your state, it is usually a requirement if you lease your car or have an outstanding loan. Failure to carry the required amount of insurance could result in you losing your vehicle. 
  • Car’s value: People who drive expensive cars usually benefit from investing in more insurance coverage. A higher-priced vehicle typically means increased theft risk and costlier repairs. 

Partner With Lewis Insurance and Financial for Trusted Coverage 

Turn to Lewis Insurance and Financial for your auto insurance needs. Unlike other insurance companies, we offer customized insurance policies designed for you. With experience, outstanding customer service and professionalism, we will ensure you get the coverage you need. Call 717-872-2466 or contact us online to learn more about personalized car insurance options.

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