Full Coverage Car Insurance vs Liability Insurance

Buying car insurance can be a bit confusing, especially for a new driver. There are many different types of auto insurance with a seemingly endless variety of coverage levels and limits.

Then, factor in the deductibles, add-on services like rental car and roadside assistance, and the novice insurance shopper will have a difficult time understanding which components are critical to have and how to keep their costs down at the same time.

The good news is, there is a lot of free information available on the Internet for consumers to educate themselves before they start car insurance comparison.

One of the basic things for a consumer to understand is the difference between full coverage insurance and liability coverage policies.

Use our FREE quote tool to compare auto insurance rates today!

Full Coverage Car Insurance

The term “full coverage” can be misleading, since there is no such thing as one full coverage-type of policy. The terminology may be used by insurance agents to describe the combination of coverage for physical damage, along with liability coverage required by law.

Full coverage can be considered the sum of liability, collision and comprehensive coverage policies. Coverage for physical damage is what is also known as comprehensive and collision coverage.

Comprehensive Coverage

Comprehensive insurance will cover damage to a car resulting from vandalism, glass breakage or theft. If a car is being financed or leased, this type of insurance is typically required.

Comprehensive will also cover most types of non-traffic related damage. This includes accidents involving roadside barriers or signage and other cars, as these are not covered by collision insurance.

When a driver hits an animal this accident would be covered by comprehensive insurance, which may not seem to make sense, but insurers think a driver has a greater chance of avoiding another car than dodging a deer.

So, comprehensive insurance covers any damages the driver has virtually no control over. Car damage as a result of break-in is usually covered under comprehensive, however anything stolen from inside the vehicle is not.

Stolen items are usually covered by a homeowner or renters insurance policy.

Comprehensive insurance will also cover other unavoidable accidents such as damage from falling tree branches, window cracks from a hailstorm, or fire that completely destroys the vehicle.

Collision Coverage

Types of damage covered by collision insurance include accidents involving the vehicle flipping over or colliding with any object or other car, except for an animal.

Typically collision coverage will cost about two times the price of comprehensive and has a higher deductible as well. Because of the higher cost drivers often choose not to buy collision insurance. If the vehicle is four years of age or newer, the value of it is probably high enough to justify the additional premium.

If the vehicle is new and financed, a bank or leasing company will also require collision to be purchased in order to protect their financial interests.

Liability Coverage

Liability coverage is made up of bodily injury and property damage insurance. Liability insurance for Bodily Injury will cover any bodily injury or death of other people for which a driver is responsible.

Liability coverage for Property Damage is used if a driver damages someone else’s property.

If a vehicle is being leased the leasing company may require a specific amount of liability coverage over and above what is legally mandated, and liability coverage is the only type of car insurance that is required by law.

Cost for Full Coverage Insurance

Fortunately for drivers, the car insurance business is incredibly competitive, which helps keep prices lower and gets car insurance companies to compete for business.

Unfortunately, if customers are working face-to-face with an agent at their neighborhood insurance company office, they may come across as unknowledgeable and agents may not give them the best deal.

It is important for consumers to educate themselves on insurance components and choose which ones they need for the most complete coverage to suit their particular situation.

It is equally important for consumers to get quotes from several different insurance carriers to make sure they get the lowest price for the right combination of coverage that fits their needs.

Use our FREE quote tool to compare auto insurance rates today!

Related posts:

1. What is Uninsured and Underinsured auto insurance coverage?
2. What is not covered under a car insurance policy?
3. What are the types of auto insurance?
4. What is PIP or Personal Injury Protection Insurance?
5. What is GAP auto insurance?