Liability vs. Full Coverage Car Insurance
With more cars on the road than ever before, there’s a good chance you’ll experience a car accident at some point in your life. Whether it’s a fender bender or a head-on collision, you still could face expensive damage and injuries. Auto insurance provides financial protection in these events. Since car accidents are common, most states require some type of car insurance to protect victims from financial ruin. But how do you know which policy to purchase? You’ll likely see plans for liability or full coverage. In this article, we will cover the difference between these types of policies and which one is right for you.
What is Liability Car Insurance?
Liability insurance is base coverage. It fulfills the minimum insurance requirement for most states. If you caused an accident, liability insurance typically covers the other vehicle’s damages and injuries. It will not cover your own. The purpose of liability insurance is to protect victims of car accidents. Drivers receive no personal coverage under these policies. Minimum coverage liability plans average at $500-$1000 per year. Since state minimums vary, the average rate changes from state to state.
What is Full Coverage Car Insurance?
Full coverage auto insurance is somewhat of a buzzword and can mean different things for different insurance providers. However, this plan usually covers both you and the other vehicle in the event of an accident (regardless of who is at fault). On average, full coverage includes minimum liability, collision, and comprehensive insurance. Collision pays for repairs following an accident while comprehensive handles expenses from other incidents (like vandalism, theft, or natural disasters). Though most states don’t require this type of auto insurance, you will need it if you rent or lease a vehicle. Full coverage insurance premiums average at $1,600-$3,000 per year.
Are There Other Types of Auto Insurance Policies?
Liability, collision, and comprehensive insurance policies cover the basics. But these aren’t the only other options out there. Some car insurance companies will bundle additional policies or allow you to add them on to your current plan. Some states even require these extra plans. Here are the most common:
Medical Payments Coverage (Med Pay)
If you were in a car accident, med pay could help with related medical or funeral expenses.
Personal Injury Protection Coverage (PIP)
If you were harmed in an auto collision, PIP could cover most injury-related expenses. Depending on the plan, this may include medical treatment, lost wages, replacement services, or funeral costs.
Uninsured/Underinsured Motorist Coverage
Say you were involved in an accident and the at-fault driver didn’t have sufficient coverage. They may not be able to reimburse you for the damage they caused. Uninsured or underinsured motorist insurance could compensate you for these expenses.
How Do You Know Which Car Insurance Policy Is Best?
The right car insurance plan for you depends on many factors: which state you live in, your driving habits, your budget, etc. You can start by doing some research. Look into your state laws and all the different types of auto insurance policies out there. Then give your auto insurance agent a call. An expert will guide you through the various options to select the best one your needs.
Contact Nickerson for Liability and Full Coverage Car Insurance
Navigating insurance jargon can be tricky. How do you know if you’re selecting the right auto insurance plan? The agents at Nickerson Insurance Services, Inc. will guide you every step of the way. Since 1961, we’ve provided a wide range of auto insurance policies for California residents, offering great coverage at reasonable rates. Whether you require basic liability or full coverage, we will match you to the best car insurance plan for your needs. Contact us today to request a free quote.