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What is the difference between full coverage and liability car insurance?

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Here's what you need to know...
  • It’s illegal to drive without your state’s minimum insurance requirement
  • Liability coverage is considered the most basic of insurance coverage you can possess
  • Liability insurance covers three different areas: bodily injury of the other motorist, bodily injury of multiple drivers in the other vehicle, and property damage

Knowing the difference between full coverage car insurance and liability insurance is as important as knowing the rules of the road. Liability will pay for damage you cause to others.

Full coverage often includes collision or comprehensive and will cover damage to your property.

As soon as you are ready to drive, you will hear the golden rule: never drive without car insurance. As you learn more about automobiles and the insurance industry, you will soon realize there are different types of insurance.

Review the details below to help decide what you need and then enter your zip above for FREE car insurance quotes!

What is Liability Insurance?

adobestock_21246556-1600x1600It’s required in all 50 states that you have the minimum requirements of insurance protection. This means that it is a crime to drive without basic liability insurance.

Liability insurance is the only policy you will be required to have. Liability insurance is your way of taking responsibility for your actions on the road.

If you damage someone else’s property, you are under obligation to pay for the damages. Since it’s unlikely you have thousands of dollars at your disposal, the only logical thing to do is buy car insurance that covers your liability.

Liability insurance covers three different areas: bodily injury of the other motorist, bodily injury of multiple drivers in the other vehicle, and property damage.

Liability insurance will be listed by numbers; for example, 50/100/25. The highest number represents (in thousands) the maximum that the insurance company will pay for each respective category.

States that require mandatory liability policies have a minimum requirement as to how much liability expense is actually covered. Therefore, 50/100/25 coverage mandates that an injured driver will be paid up to $50,000 for bodily injury, $100,000 for total drivers, and $25,000 for property damage.

Unfortunately, many states are lax on the minimums of car insurance allowable. Some states may only have $15,000 to cover high medical or automobile expenses.

When a person does not have any insurance or does not have enough liability insurance to cover the damages, the other motorist covers it with a policy protecting against uninsured or underinsured motorists.

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What is Full Coverage Insurance?

Full coverage insurance is not required in any state. This is coverage that protects you and your automobile. If you feel that you do not need collision coverage or comprehensive coverage, then you are not obligated to buy this policy.

This is the most expensive coverage because you are insuring your vehicle and asking the insurance company to pay for the damages you do to your car.

Many motorists are surprised to learn that they can cut their car insurance premiums in half (or perhaps even more) by cutting full coverage from their policy.

They do take on the full risk of their own property damage and medical bills when they do this. However, since they are not obligated to pay more money in premiums, they do get to save a lot of money by the month.

Two Policies with Different Levels of Protection

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Though full coverage car insurance is not required by law, most car dealerships and banks will require their financing customers to purchase a comprehensive insurance policy instead of just liability insurance.

Full coverage insurance protects cars against total destruction or flood damage. If you can’t afford to buy a new car, then it’s time to start thinking about a full coverage policy.

If you need help searching for car insurance, use our FREE tool to start comparing full coverage insurance rates!

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