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What is the difference between full coverage and liability?


A

Agents need to be careful when using the term Full coverage. You can never be fully covered for all scenarios. Typically, Full Coverage is meant to represent liability coverage along with coverage for your car (physical damage). The main difference between Liability and Full Coverage is that with Full Coverage your car has insurance protection with which you can make claims with your own insurance provider while Liability coverages are there for those that you damage and need to make claims against.

Liability coverage helps protect you from covered damage your car does to others, damage for which you are legally liable and without liability insurance would have to pay out of pocket for damages you cause. In some cases these damages could grow into hundreds of thousands of dollars.

Liability coverage is the foundation or basis of an auto insurance policy normally, and is required in most states. State liability laws differ but the most require Liability coverage of Bodily Injury (BI) and Property Damage (PD).

The purpose of BI and PD is if you are at fault in an accident, your Liability insurance will pay for the bodily injury and property damage expenses caused to others in the accident, including your legal bills. Bodily Injury coverage pays for medical bills and lost wages of the person you injured. Property Damage covers you if your car damages someone else's property. Usually it is their car, but it could be a fence, a house or any other property damaged in an accident. It also provides you with legal defense if another party files a lawsuit against you.

Keep in mind that if you cause a serious accident a state's minimum liability insurance limits may not cover you adequately. In most states drivers are allowed to sue other drivers who injure them in car accidents. If you are sued and your Liability insurance limits are not high enough to pay for all of the damages, your personal finances could be at risk.

Technically there is not any actual insurance coverage termed "Full Coverage," people commonly though use this phrase to mean having both the state required Liability insurance coverages and Physical Damage coverages of Collision and Comprehensive on a vehicle.

Collision coverage covers damage to your vehicle when your vehicle hits, or is hit by, another vehicle, or other object. This type of physical damage coverage pays to fix your vehicle, less the deductible you choose at the onset of your policy.

Comprehensive coverage covers your vehicle, and sometimes other vehicles you may be driving, for losses resulting from incidents other than collision. The incidents listed on a comprehensive policy typically include your vehicle being stolen, damaged by flood, fire or animals. This type of coverage also comes with a deductible.

While these are the coverages most think of when a person refers to Full Coverage, the term itself is very subjective and can have different meanings to different individuals, companies or additional interests in an insurance contract. "Full coverage" does not mean however that you have insurance coverage for every possible injury, liability exposure or part on your vehicle.

Many people that buy full coverage and then need to make a claim are upset because they are not really fully covered. It would be hard to buy a policy where you are fully covered against ever exposure but you can protect yourself from the most common exposures.

Reading our article titled, How Much Car Insurance Should You Buy? should be helpful in learning more about insurance coverages. Also our article on Auto Insurance Basics is informative.

Remember if you only purchase Liability coverage than you will not be able to file any claims with your insurer if you are in a collision that is your fault or even if a person hits your car in a parking lot and takes off. You also will not have coverage if your car is stolen, catches on fire, is vandalized or you hit a wild animal (such as a deer). For your vehicle to be covered by your auto insurance policy for these types of incidents you will need to purchase "full coverage" meaning Physical Damage coverages of Collision and Comprehensive.

You can get a quote for car insurance, Liability only or Full Coverage, here with us.


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