Liability Versus Full Coverage Insurance: What's the Difference?

If you’ve never had a car before, or if you’re in the market for a new auto insurance policy, you may be wondering what all these terms mean. Liability coverage? Comprehensive and collision? What exactly are you supposed to be buying? Don’t worry, we can help. 

The Basic Definitions

Let’s start with some auto insurance basics:

Liability coverage essentially covers the medical and property damages for drivers other than yourself. In other words, if you’re at fault for an accident, it covers the cost you created for the other person. Liability coverage comes in two basic forms: bodily injury (BI) and property damage (PD). Often paired with liability coverage is uninsured or underinsured motorist coverage (UMBI, UIMBI, and/or UMPD, depending on your state). This covers your costs if an at-fault party doesn’t have the necessary coverage to pay for your damages.

What people generally think of as “full coverage insurance” is a liability policy that protects other drivers in addition to comprehensive and collision coverage that pays for damage to your car in certain situations. Full coverage insurance includes collision coverage, which covers the damages to your vehicle as a result of an accident, and comprehensive coverage, for damage that occurs to your vehicle that was not caused by an accident. Comprehensive coverage pays for damage resulting from unforeseen circumstances like theft, vandalism, weather, and falling objects.

What’s Required of You As A Driver

Most states have minimum requirements for auto insurance coverage. For example, California insurance requirements consist of a minimum of: 

• Bodily injury insurance that covers $15,000 per person or $30,000 per accident 
• Property damage coverage for up to $5,000

All drivers must meet or exceed their state’s requirements in order to drive legally. But before you choose a low cost auto insurance policy that only includes liability insurance, you’ll need to take some other factors into consideration. 

You may choose to purchase only liability insurance if you own your vehicle. However, if your car is financed, then your lender will likely require that you carry additional coverage which will typically include comprehensive and collision coverage with a maximum deductible that they specify. If you lease your vehicle, the dealership will require full coverage and may also require higher liability limits. This shouldn’t be a cause for concern. There are plenty of cheap full coverage auto insurance options.

Finally, you’ll want to consider which insurance options will meet your needs. Would you be able to cover the cost of damages to your vehicle from a wreck? From vandalism? 

Building A Policy That Works For You

As you compare car insurance policies, you’ll want to consider what coverage you need as a driver. Often, you may find that you need more than the state-required minimum insurance  Although it may be tempting to think that the most affordable car insurance will be the one with the lowest monthly premium, you’ll also want to factor in long-term costs of paying for repairs out of pocket for anything that isn’t covered by your policy. 

With Humble Eagle, we can help determine the best insurance options for your specific needs. We can also find the best car insurance rates regardless of your driving history. So whether you own your vehicle and only want basic coverage or if you’re looking for low cost auto insurance with full coverage, we can provide a quick quote for you, instantly.