The Difference Between Liability And Full Coverage Car Insurance
Shopping for cheap auto insurance isn’t the easiest task. Your auto insurance agent can help you compare rates and get you the best deals. The entire process of choosing the best and most affordable car insurance plan for you is kicked off by asking if you want both liability and full coverage car insurance.
Almost all 50 states require motorists by law to carry some form of liability coverage. Liability coverage is what pays for physical and medical damage to others if you are at fault for an accident. The amount of liability insurance you have to carry varies by state but since you are personally financially responsible for anything the insurance doesn’t cover it might be in your best interest to get the best liability coverage you can afford. Remember, liability pays for the damages to the other party in the event you cause an accident. In most states, you cannot renew your license without proof of insurance and there are steep fines if you cause an accident and do not carry liability insurance.
Many people are tempted to only take out the minimum insurance necessary by law and just hope for the best. It makes sense, no one wants to pay extra insurance premiums if they don’t really have to. But what would happen if you got into an accident that was your fault and you only carried liability insurance? Your own medical costs and damages to your car would not be covered, at all. The burden would be 100% your own responsibility. While your health insurance might cover your medical expenses, most people in America can’t get by without a car. If your car is totaled or badly damaged, could you afford to repair or replace it out of pocket? If the answer is no then you need to look at full coverage.
Full coverage, as a term, is a bit misleading, it doesn’t cover everything 100% but depending on your policy it can remove most of the risk. You can choose to only get a collision insurance policy (which pays for damage caused in a crash) or you can get comprehensive coverage that also covers damage that results from the weather, theft, or vandalism.
Again, there are different levels of coverage and your insurance agent can help you choose an affordable rate that also covers your needs.
Why Should You Get Full Coverage Insurance?
What’s the difference between liability and full coverage for auto insurance, and do you need both? Getting the right auto insurance to fit your needs at the best possible price might be a confusing task at first glance but with the help of an auto insurance broker, you’ll be driving your new car in no time with just the right amount of coverage.
In America, liability car insurance is required by almost all 50 states. It’s mandatory that you have it and there is a state minimum insurance requirement as well. Liability insurance pays the other party for property damage and bodily injury if you get into an accident that is deemed your fault.
There is no such law mandating full coverage, that decision is left up to the individual. Full coverage would cover the driver at fault for property and bodily injury. Without it, however, you’ll have to pay full price out of pocket for the cost of repairs, medical bills, or a whole new car if you get into an accident. Taking out full coverage will cost you more in premiums but could save you a lot of money in the long run if you ever get into a major accident.
Who Would Benefit Most From Full Coverage?
If you purchased your car with financing from a bank, meaning you took out a loan to buy the car, then you don’t have a choice. Your lender will make you get full coverage in order to protect the asset while you’re still making payments on it. If you paid for the car in full yourself, then you have the option of using full coverage only if it suits your needs.
To figure out if full coverage is right for you, ask yourself three questions. The first question is, can I afford to pay for a new car if this one is totaled? Buying a car isn’t cheap, besides a home it will probably be your largest financial investment. If you were to get into a wreck next week and total it, could you get another one this soon? If the answer is no, and you depend on your car for transportation, then you’re going to want full coverage.
The next question is, how expensive is your car? If you bought a cheap car then maybe paying a high monthly premium isn’t in the cards for you. If you bought a brand new car or a more expensive used car then that’s an investment you’ll want to protect.
The final question is, how much risk are you willing to take? Insurance is really just paying to transfer your risk to another party. Some people are naturally more risk-averse than others. If not having coverage is going to cause you sleepless nights then it’s better to have peace of mind.
Explaining Uninsured Motorist
Your auto insurance protects you in the event you cause an accident and if someone hits you on the road then it’s assumed that their insurance will cover the damages. While it’s the law in every state to either have insurance or provide proof of financial responsibility, that doesn’t mean that all drivers on the road are insured. In fact, as many as 13% (or 1 in 8) drivers are uninsured. Also, if a driver has the bare minimum liability coverage then it’s possible their insurance won’t be enough to cover the damages in all cases.
So what do you do if you get hit by an uninsured or under-insured driver? Since the accident wasn’t your fault, your own auto insurance might not cover it, leaving you to pay out of pocket. You can try to sue the other driver for damages but if they are driving uninsured then there is a good chance they have no assets to pay you with even if you win. This is where having uninsured motorist coverage could step in and rescue you.
Types of Uninsured Motorist Coverage
For a small extra fee per month, you can add uninsured motorist coverage to your insurance. A few states even make this a legal necessity. Even if you don’t have to take out it by law, it could be a good idea, especially if you don’t have the funds in savings to protect you if you get hit by an uninsured driver. Most of the time, this is also the coverage you will use if you are involved in a hit and run, where you don’t get the other person’s information.
Uninsured Motorist Bodily Injury Coverage - This will help pay your medical bills for yourself or anyone in your car during the accident that was not your fault but caused by an uninsured driver. It might also protect you from underinsured drivers, although sometimes that is a separate add-on.
Uninsured Motorist Property Damage Coverage - This will help pay for damages to your car after a hit and run or uninsured driver accident. To avoid having to pay out of pocket, you’ll want this insurance. It’s especially important if you live in an area with a higher than average percentage of uninsured drivers on the road. These can be large urban areas or low-income areas.
Check with your insurance provider to see what the laws are in your area and how much it would cost to obtain uninsured motorist protection for you and your vehicle.
What is Rental Coverage and Do You Need It?
If you’ve ever rented a car then you’ve probably experienced the awkward hard-sell of the “rental insurance policy” at the counter. Put on the spot, it can be hard to assess if you need this extra insurance or not so many people just opt to take it out and pay extra. But what is this policy and do you really need it?
What Is Rental Car Coverage?
The policy is offered to you for purchase at the time you rent a car is usually a loss and collision damage waiver (LDW). This will clear you from being held liable for any damages if the car is damaged in a crash, vandalized or stolen. Sometimes you may also be offered extra liability insurance that includes property and medical care for the other party if you cause an accident, personal accident insurance that covers your own medical bills after a crash, and personal effects coverage for any property you have in the car that gets damaged or stolen.
The LDW, if cheap enough, might be a good idea just to completely clear you of all financial charges in the event of loss or damage. The other add-ons are probably redundant depending on the type of car insurance you already carry.
Do You Need Additional Rental Car Insurance?
Knowing that you’ll be hit with this question when you check-in at the rental place, make sure to check your personal policies beforehand so you know what coverage you already have.
Car Insurance - If you have adequate liability, collision and comprehensive coverage then you are probably already covered. Most of the time full coverage includes rental cars. If you have a minimum policy then you might want to call your company to see if they recommend rental insurance.
Health Insurance - Check your health insurance policy to see if it covers you and your passengers in a car accident. If you have personal accident insurance then you might be covered already.
Homeowner’s Or Rental Insurance - For personal items, check your existing homeowner’s policy for coverage of lost or stolen items.
Stand Alone Rental Car Policies - If you travel a lot and rent cars often then it might benefit you to have a stand-alone rental care policy. Check to see if this policy is cheaper or more expensive than the coverage offered by the car rental place you choose.
Does Full Coverage Insurance Cover my Rental?
It's probably safe to say that nobody wakes up in the morning and decides to have an accident. No, they go about their business until with a screech of tires and the sickening sound of metal being torn out of shape they sit in the eerie silence of a motionless car that's been abruptly and brutally stopped. That might be the first time they've given any thought to their car insurance since they wrote the check for the last premium.
Are You Really Fully Covered?
Those that have full coverage on their car will probably have the least impact from an accident. They will have a rental car to drive, everyone's medical bills will be taken care of, their insurance company will deal with any lawsuits that might arise if the accident is their fault and eventually life will return to normal.
But what does full coverage really cover?
Full coverage includes collision, comprehensive, and liability. Those who have taken out a loan in order to buy their car are required by their financial institution to have collision in order to protect the lender's investment. People also choose to have this type of coverage if their vehicle is of a recent model year. If your car is damaged or totaled while covered with this insurance it will be repaired or replaced.
Comprehensive insurance reimburses you for damages incurred if your car is damaged in anything other than an accident with another car. Hail and other weather damage are covered as well as if you have an accident that involves only your car. Liability coverage pays the other driver in an accident that is your fault and also reimburses the owners of any property you might destroy in an accident such as a fence, a house or public property like guard rails.
Pay Attention to Limitations
When you buy a policy you'll be asked what limitation you want. Of course, the higher the limits the more expensive the premium will be. You may be tempted to accept lower limits but think carefully before you do so! Medical expenses are on the rise and show no sign of stabilizing, the cost of repairing a car is also increasing, and having an accident these days practically guarantees a lawsuit. Do you really want to skimp on the limits of your insurance? Every state dictates the minimum coverage that you are required to have. Liability limits have three categories; the highest amount it will pay per person, highest per accident, and the highest complete amount of property damage per accident. The higher your limits, the more your policy will pay.
Minimize Your Costs
Choosing lower limits of coverage is not a good way to save money! You can set high limits on your insurance and yet still have reasonable premiums by choosing a higher deductible. You should also look into which discounts you qualify for and take advantage of them. Shop around by getting online quotes from several companies in order to save the most money on your insurance and still get full coverage.
Adding roadside assistance coverage to your auto insurance policy can give you peace of mind and save you money over time. Offered as an add-on, roadside assistance offers a wide variety of emergency services for only a small increase in premiums per year.
If you drive an older car, have teen drivers, or have a long daily commute then roadside assistance can certainly pay for itself quickly. Roadside assistance connects a network of service providers with one convenient number you can call when you need help. They will dispatch the closest service provider to your location based on your needs. When you’re stuck on the side of the road, the last thing you want to do is spend an hour looking up help on your cell phone.
The main goal of roadside assistance is to perform minor mechanical repairs and services to help get you back on the road if you breakdown. Here are the main services you can expect from roadside assistance programs:
Battery Service- Many stalled car incidents are the result of a failed battery. You can get a jump start or battery charge from roadside assistance.
Flat Tire Assistance- Not everyone can change a flat tire or sometimes your spare isn’t operational when you need it, so flat tire assistance can come in handy especially if you are traveling alone.
Fuel Delivery- It happens to the best of us, if you have a lot on your mind you might forget to keep an eye on your fuel level. Go too far ignoring the warning signal and your travels might come to an abrupt end. Stuck in the middle of nowhere with no gas in the tank can be a bummer. You’d have to get your walking shoes on if you didn’t have roadside assistance to back you up.
Lockout Service- Locking the keys in the car is a common occurrence so if this has happened to you, you are not alone. Calling a locksmith can be quite expensive depending on your location, the time of day or day of the week. You’ll be happy you have roadside assistance, especially if you get locked out more than once in a year.
Extrication- Extrication helps get your car unstuck if you run off the road or get in an accident. Stuck in a ditch? Roadside assistance will be there to help you.
Limited Towing- If roadside services can’t get your car operational again then limited towing services are available. Towing insurance, in general, is a separate add-on but if it’s related to one of the issues above then the towing might be covered by roadside assistance.
Coverage to Fix Your Broken Windshield
One day, you are driving along. Suddenly, the car in front of you kicks up a rock that flies into your windshield. It leaves a significant crack in the glass that impacts your line of sight. Because this was an unavoidable accident, your car insurance might offer some recourse. However, some limitations exist. Consider how your policy can aid you following a damaged windshield.
Covering Windshield Damage
Many auto policies can cover windshield damage. However, never assume. You usually must add the correct coverage to your policy.
Most basic car insurance policies will not automatically cover windshield breaks. The lowest level policy in your state will likely only include liability insurance. This coverage only extends to the damage or injuries you cause others in an at-fault accident.
To cover damage to your own car, you'll likely need to tell your agent to add collision and comprehensive protection to your policy. You might also need uninsured/underinsured coverage.
- Collision insurance will pay for vehicle damage, like windshield breaks, resulting from wrecks.
- Comprehensive coverage covers damage that did not come from an accident. For example, it may pay for a vehicle damaged by fire, weather, theft and more. This coverage is often particularly critical when it comes to windshield protection.
- Uninsured/underinsured coverage lets your policy pay for damage caused by someone else. If that party doesn't have appropriate liability insurance, you can use this to pay for your losses.
Deductibles And Coverage Limitations
Remember, times may arise when you cannot get coverage for your windshield damage.
- The cause of certain types of damage might cause your insurer to exclude coverage. For example, damage from normal wear and tear might receive no insurance compensation.
- You will likely have to pay a deductible on any vehicle damage. This is your financial responsibility before insurance pays their part of the claim. If windshield damage falls under the value of the deductible, your insurer will not pay. This might occur more often than you think, as many windshields only cost a small amount to repair. Replacements, however, might prove costlier. Let your insurer determine your qualifications for a claim.
In some cases, you have the chance to add full glass coverage to your policy. It will work alongside your comprehensive coverage. It can reduce or eliminate a deductible following a windshield break.
New to Cheapest Auto Insurance?
Getting full coverage insurance shouldn't break the bank and here at Cheapest Auto Insurance we understand that. Our insurance agents are available to help you get a quote to give you the peace of mind that you are full covered and to get you back on the road as quickly as possible! Call us at 9187445145 to get a quote today or click here for an online quote!