Full Coverage & Liability Only Insurance

Liability Only car insurance and Full Coverage car insurance stand at two opposite ends of car insurance spectrum. However, there are multiple levels of liability and full coverage car insurance and there also are several steps between these two levels. To get a clear picture of car insurance you need to know what exactly is the meaning of and difference between these two types of car insurance.

Liability Only Car Insurance

Car Insurance is always regulated at state level. Every state has its own guidelines regarding the minimum amount of car insurance that is to be covered so that you can drive your vehicle. In fact, all the states have laws that state that you must have minimum liability insurance in order to drive your vehicle legally. This is that type of insurance which covers the damages caused to other people and their property due to your vehicle.

How Liability Is Worked Out

The minimum liability insurance is stated in three parts like 20/40/18. In this example, the first number signifies that the insurance company in that particular state will pay that amount of money for a single individual injured, per accident. The number '40' signifies the amount your insurer pays as a whole for all injuries caused from a single accident. Lastly, the third number signifies the maximum amount the insurer will pay for damage of property, per accident. Hence that particular state the figures would be $20,000 for bodily injury per victim per accident, $40,000 for total injuries in an accident and $18,000 for property damages coverage, per accident.

However, a point to note is that these figures are the 'minimum' coverage an insurance company will pay. So, it is always wise to have an extra coverage. According to the previous example, if you had an accident and caused damages of up to $80,000 in bodily injuries then your auto insurance company must pay only $20,000 and the rest of $60,000 are to be paid by you. This rule might not or might be applicable in states which are called "no-fault" states, 12 in number.

Full Coverage Car Insurance

There are 2 types of coverage insurances on top of liability car insurance. They are collision coverage and comprehensive coverage. Comprehensive coverage insurance can come without collision car insurance, but vice versa is not possible. An insurance policy that has liability coverage and comprehensive coverage stands somewhere in between the legal minimum coverage and "full coverage".

Another term to refer to comprehensive coverage is OTC or "other than collision" coverage. It covers those damages caused to your vehicle that occurred due to someone or something else, other than a collision like damages due to weather, fire, theft, etc. Many times accidents with animals are also counted under comprehensive coverage. The idea behind this fact is that comprehensive car insurance is designed to cover those things that have least chance of being your fault.

Collision coverage comes as an add-on that is optional to your comprehensive coverage. However you may not have collision coverage without any comprehensive insurance.

Choose Wisely

Many people find car insurance to be an expense luxury. However, it is an investment. While you choose ant one these insurance policies for your vehicle like full coverage, liability only or something that stands somewhere in between, be sure that you are not paying more than what you are actually supposed to for the type of coverage you require. To find the best insurance coverage to suite your needs is to compare various schemes from different companies. It has been seen that in many cases people are actually able to save their money and at the same time they are get full coverage as well. Thanks mainly to multiple insurance quotes.