Liability vs. Full Coverage Auto Insurance

Buying auto insurance can be a rather confusing task for many consumers. Most drivers don\'t understand the coverages they are purchasing; moreover, they don\'t really care until an accident happens. In order to obtain the protection you need, though, it is important to understand your insurance policy. One of the most crucial distinctions is liability vs. full coverage auto insurance.

Liability insurance protects other drivers if you cause an accident. There are typically two elements to liability insurance - bodily injury coverage, and physical damage coverage.

Bodily injury liability coverage pays for the medical expenses and injuries of another driver or passenger who is hurt in an accident. It also typically covers pedestrians. In some cases, it may also pay for the other person\'s rehabilitation expenses.

Physical damage liability coverage pays for the personal property you damage when you cause an accident. This can include another driver\'s vehicle, as well as the personal property carried in that vehicle. It also pays for damage to other property, such as fences, utility poles, etc.

It is important to understand that liability coverage does not pay for your injuries or your personal property. In some states, it will pay for injuries to your passengers - this varies according to state law.

Full coverage auto insurance includes liability coverage, but it also includes other coverages designed to protect you, even if you cause an accident. The most important elements of full coverage are comprehensive and collision coverage.

Comprehensive coverage pays for the repair or replacement of your vehicle if it is damaged by an event other than an auto accident. This included fire, theft, vandalism, and collision with an animal.

Collision coverage pays to repair or replace your car if you are in an auto accident. It also typically pays for your personal property that is contained in the vehicle at the time of the accident.

Whether you need liability or full coverage auto insurance depends largely on whether you are still making payments on your vehicle - most lenders require you to carry full coverage until the car is paid off. It also depends on the value of your car - if you have a relatively new car with good resale value, it makes sense to buy full coverage to protect your investment. On the other hand, if you have an older car with low resale value, you might opt to save money on your premiums by purchasing only liability coverage.