Liability vs. Full Coverage Car Insurance

Before picking an auto insurance plan, understanding the various coverage options—liability or full coverage—will help you choose the right policy that best meets your needs.

The following will be covered in this article:

  1. An Overview of Liability Coverage Auto Insurance Policy.
  2. Damages Not Included in Liability-Only Insurance.
  3. An Overview of Full Coverage Auto Insurance Policy.
  4. Damages Included in Full Coverage Insurance.
  5. Damages Not Included in Full Coverage Insurance.
  6. Which Is Better, Liability vs Full Coverage?


An Overview of Liability Coverage Auto Insurance Policy.

Liability-only auto insurance covers other people’s medical expenses as well as property losses when you are at fault for an automobile accident. 

Two forms of liability protection are offered by liability coverage if you cause an automobile accident:

  • Liability for bodily injury: This covers funeral fees, lost wages, and medical bills for people who are hurt or killed, including pedestrians and other drivers.
  • Property damage liability: Covers other victims’ losses, including auto repair costs. If you are sued for money by the victims of an automobile accident, your legal costs will be paid for by your liability coverage as well.

Liability insurance only covers the losses of other people; it never covers your injuries or property damage. You must get collision and medical payment insurance if you want these safeguards.


Damages Not Included in Liability-Only Insurance

Liability insurance does not cover the following types of losses:

  • Dent work on your car.
  • If the car is stolen.
  • Injuries from an accident that you or your passengers sustained that are covered by Medpay.
  • Driving a car for a ride-sharing company such as Uber.
  • Driving a delivery vehicle for companies.
  • Competing in street racing.
  • Typical degradation.
  • Customized equipment or modified parts.
  • The devastation of law enforcement.


An Overview of Full Coverage Auto Insurance Policy.

Full coverage refers to an auto insurance policy that provides the following benefits: 

  • Liability protection.
  • Collision insurance: This policy covers the cost of repairs to your car after an accident. It covers both traffic dangers and collisions with other cars, excluding animal-related accidents.
  • Comprehensive insurance: This insurance policy covers damage to your car caused by animals, natural disasters, theft, or vandalism.
  • Health insurance payments (MedPay): For you and your passengers, this add-on covers costs like medical bills and missed income.
  • Personal injury protection(PIP): PIP insurance is mostly utilized in no-fault states and covers medical expenses for you and your passengers.
  • Uninsured/underinsured motorist coverage: This policy will pay for associated medical expenses and property damage if you are in an accident with another driver who is at fault but does not have insurance. 


Damages Included in Full Coverage Insurance

  • Burglary / Vandalism.
  • Trees falling and other similar objects.
  • Natural catastrophes, such as lightning, rain, flooding, earthquakes, and fire.
  • Glass and windscreen damage.


Damages Not Included in Full Coverage Insurance

  • Driving off-road.
  • Driving for a ride-sharing business like Uber.
  • Driving a delivery vehicle for a company.
  • Racing on the streets.
  • Normal aging and wear.
  • Customized components or apparatus.
  • Destruction caused by the police.


Which Is Better, Liability vs Full Coverage?

Depending on how quickly you pay off your auto loan and the worth of your car after depreciation, full coverage may be more advantageous than liability coverage.

If you are financing your vehicle, your lender will probably demand that you keep up full coverage (and occasionally gap insurance) until the loan is repaid. After repaying your debt in full, you might choose to no longer have full coverage.

Also, when a car’s value depreciates, drivers frequently take out full coverage from their insurance. You are advised to stop receiving full coverage after your car reaches 100,000 miles or five years old, assuming you have paid off your auto loan.

An additional factor to consider is the cost of repair and replacement parts for your particular car model. Luxury brands, for instance, could require costly replacement parts, which raises the cost of repairs. It can be worthwhile to keep your full coverage for a longer period if the anticipated cost of repairs is far more than your deductible.

But if you want to pay a lower premium, don’t mind having fewer coverages, and don’t mind that your car’s value has decreased dramatically because of depreciation, liability-only coverage is usually a better choice.  

It is crucial to take your level of protection for both you and your automobile into account when choosing between liability and full coverage auto insurance. Getting liability insurance will not cover you or your vehicle; it will only cover other cars and their injuries. You, your automobile, and any other persons involved in the collision are all covered by full coverage auto insurance.