Buying a car is one of the most significant investments most people make. So it is essential to have coverage in the event something happens to your car. But you do not want to spend a fortune on insurance. So figuring out the difference between liability and full coverage is a great first step towards protecting your investment.
Liability auto insurance is required in most states since it protects yourself and others in an accident. On the other hand, a full coverage policy is optional and tends to cover any accidents or damages to the vehicle.
In this article, our expert team of insurers will give you a brief overview of liability and full coverage insurance, the difference between the two policies, and which would work best for your situation.
What is Liability Car Insurance?
Liability auto insurance is a mandatory policy that every person who wants to buy a car has to have. It is also sometimes referred to as third-party insurance since it protects other people, not you or your vehicle. This type of coverage pays for the damage that one’s vehicle causes to other people or property in an accident.
Liability insurance is usually divided into bodily injury liability and property damage liability.
- Bodily injury liability coverage pays for medical expenses, pain, suffering, lost wages, and other legal costs should you be involved in an accident that has resulted in injuries or the death of another person.
- If your vehicle crashes into it, property damage liability protects other people’s property.
Note that liability insurance will never pay for your damages or injuries after an accident; it will only cover other people’s expenses. So if you want your vehicle to be fully covered in case of an accident, you will need to purchase additional car insurance policies.
Read here for a complete guide on liability insurance.
Pros and Cons of Liability Insurance:
While liability insurance is crucial in ensuring that you are protected in case of an accident, it also has a few downsides.
Below are a few pros and cons of purchasing liability insurance:
- It is very affordable
- Liability insurance protects you if someone files a claim against you. The amount of money needed to pay for that person’s injuries or damaged property will be covered by your policy.
- If you want to purchase additional coverage for your vehicle, liability insurance automatically covers anything your car will need.
- Liability insurance does not pay for your injuries or damages in the event of an accident; it only covers the expenses of other people that are injured in a collision.
- It is required by law which means you cannot drive a vehicle without it in most states.
How Much Does Liability Insurance Cost?
Liability insurance is usually the cheapest type of coverage you can purchase in terms of car insurance. In addition, the minimum amount one needs to have is low, so this type of policy does not cost a fortune.
Although liability insurance can be pretty inexpensive, there are instances where its costs might appear higher than usual. This usually happens to people with bad credit scores and driving records that are less than perfect. Therefore, it is best to get car insurance quotes from multiple companies to find the lowest prices for this type of insurance coverage.
Where you purchase liability insurance also affects the costs involved. Therefore, one should be sure that they check out all their options and compare auto insurance quotes from several insurance providers in TX before committing to buy anything since different companies may be selling the same policy at different prices.
What is Full-Coverage Car Insurance?
Full-Coverage car insurance is also known as comprehensive or all-risk car insurance since it covers pretty much anything that can happen to a vehicle. Unlike liability insurance, full coverage protects the policyholders for medical and repair costs even if they are responsible for the accident.
Full-coverage auto insurance is not required by law, so it is up to the driver whether or not they wish to have this type of policy. However, it usually consists of four different types of coverage:
- Bodily Injury Liability covers injuries other people suffer if you are at fault for an accident.
- Property Damage Liability pays for damage to property that was not your own if you were deemed responsible for it.
- Collision covers any physical damage done to the car due to an accident.
- Comprehensive protects any non-accident-related problems such as weather damage or vandalism.
Pros and Cons of Full Coverage Car Insurance:
Though there are not many negative factors associated with full coverage insurance, there are still a handful of things to watch out for.
- One’s medical and repair costs following an accident, so this type of policy is very useful in protecting you financially or physically.
- Full coverage car insurance does not discriminate based on one’s driving history or credit score, so everyone is qualified to purchase it.
- Since comprehensive coverage protects the policyholder from non-accident-related incidents, this type of policy tends to be more expensive than others.
- Auto insurance companies view anyone who possesses full range as a high-risk client, and they might end up charging ridiculous amounts of money for their premiums which can be a hassle to pay every month.
What Does Full-Coverage Car Insurance Cost?
In most cases, comprehensive coverage can be more expensive than liability or other full-coverage insurance. This is because the risks involved with this type of policy are higher, which means that the companies who are offering it want to make sure they get their money’s worth.
The cost of full coverage car insurance varies between different car models and countries, but generally speaking, most drivers pay around $100-$200 per month to insure their vehicles. This is quite a bit of money, but it protects against any damage done to your car, which can save you from being in a significant amount of debt.
What is the difference between both Liability and Full- Coverage Car Insurance?
The main difference between liability insurance and full coverage car insurance is that they offer different levels of protection.
Liability insurance only covers the damage done to other people in case of an accident. Anyone can purchase it, but it does not provide much coverage for the driver.
Full coverage insurance protects non-accident-related incidents and bodily injury or property damage. This type of policy is usually more expensive than liability car insurance because it pays for so many different damages.
The fact that liability insurance is required by law and is not very expensive makes it ideal for people who rarely drive and those with low credit scores. On the other hand, full coverage car insurance can be costly, but it also provides protection from accidents and different types of damage, which makes it more practical.
Liability vs. Full Coverage: Which is Worth the Cost?
From all we’ve discussed so far, it’s pretty clear that full coverage car insurance, though more expensive, is much more practical than liability insurance, as it provides both protection and saves you money.
However, if you’re a very cautious driver, you may not need full coverage, which means that liability car insurance will probably suit your needs best. Insurance companies love people who don’t take risks, so they’ll be happy to offer you a good deal.
Whether you decide to go with full coverage or liability insurance, do not forget to call several auto insurance companies and ask for an auto insurance quote before making a final decision. You may save money by comparing rates on different policies, so always read the fine print before committing to anything.
TX Insurance Quotes are an excellent option if you need instant comparison on different types of auto and homeowners insurance quotes. Contact us today to learn more!