civil liability vs. full coverage: in-depth analysis
To further highlight the differences between liability insurance and full coverage auto insurance, the following sections explain each type of coverage in detail:
what is auto liability insurance?
Liability auto insurance is generally divided into two types of coverage: bodily injury liability and property damage liability. Both types of coverage pay another driver’s expenses after an accident for which you are at fault.
- Bodily Injury Liability – This type of liability coverage pays for expenses such as medical bills, lost wages, and compensation for pain and suffering.
- Property Damage Liability: This coverage pays for expenses such as vehicle repair costs and damage to buildings or fences.
- a maximum of $15,000 bodily injury liability is paid per person per accident
- a maximum of $30,000 is paid for total bodily injury liability per accident
- a maximum of $5,000 is paid to cover property damage liability per accident
- Collision Insurance: This policy pays the cost of damage to your vehicle after an accident. includes collisions with other vehicles and road hazards. collision coverage does not include accidents involving animals.
- Comprehensive insurance: Comprehensive coverage pays for damage to your vehicle caused by animals, natural disasters, theft, or vandalism.
- medical payments (medpay): This add-on pays for expenses such as medical bills and lost wages for you and your passengers.
- Personal Injury Protection (PIP) – This type of coverage pays medical bills for you and your passengers and is primarily used in no-fault states.
- Uninsured/Underinsured Motorist Coverage – If you are involved in an accident where the other driver is at fault and you are uninsured, this coverage will pay for damages to property and related medical costs. You can also make up the difference if the other driver is insured but his policy doesn’t fully cover the cost of the damage.
Liability insurance coverage limits
Liability auto insurance policies do not cover an unlimited amount of damage. When you purchase auto liability insurance, your policy will include coverage limits described by three numbers. For example, the minimum liability insurance required in California is 15/30/5.
These numbers represent the following:
Minimum requirements vary by state, but you can always purchase policies with limits higher than your state’s minimum. If your insurance policy doesn’t cover the full costs associated with an accident you cause, you can be sued in civil court to make up the difference.
what is full coverage insurance?
“Full coverage” is a term used to describe an automobile insurance policy that includes liability coverage as well as comprehensive and collision coverage. A full coverage insurance policy may also include medical coverage and uninsured/underinsured motorist (um/uim) coverage.
This is what each of these types of insurance includes:
Full coverage auto insurance is not required by law in any state. however, if you finance or lease your vehicle, your lender may require you to maintain full coverage auto insurance as part of the lease/loan agreement.
do you need full coverage car insurance?
Liability insurance is required in most states, but not full coverage insurance. While a full coverage policy is a good idea for many drivers, it’s not always worth it. To a large extent, whether you should buy liability or full coverage depends on your finances and the value of your vehicle.