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Auto Insurance: Liability Vs. Full Coverage

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When you buy an auto insurance policy, you may have numerous decisions to make. However, the primary decision is whether to choose liability or full coverage. These two choices provide completely different coverage, but one is likely the best choice for your situation. When choosing, you'll need to learn the differences and the factors to consider before deciding. Keep reading to learn these things.

The differences between liability and full coverage

So what is the difference between these two coverage types? There are several differences. Liability insurance is something you get with a liability-only plan and with full coverage. Its purpose is to pay for damages that occur to other drivers from accidents you cause. That's the only thing it's for. As a result, if you cause an accident and have this coverage, your insurance company pays the bill. This protects you financially, as the other driver can't sue you for your personal assets.

Full coverage offers liability protection but more. It covers your own car if you cause an accident. Therefore, you have coverage for every situation. Of course, your coverage is not for accidents other people cause. Instead, their liability coverage protects you.

Keep these thoughts in mind when deciding which type to buy. One additional thing to know is liability coverage is less expensive, as it offers less protection.

The factors to consider before deciding

You can base your decision on several factors. First, what is your loan status on the vehicle? If you don't have a loan, choose either option. If you have a loan, choose full coverage. Next, consider your car's value if you don't have a loan. If your car is valuable, you'll take a big risk driving without full coverage. After all, an accident can occur at any time. If you cause it, you'll lose your car and receive no compensation for it from your insurance.

Finally, consider your financial situation. Can you afford full coverage? You can always ask an agent for a quote for both types. Then you can compare them to see which you can afford. Purchasing full coverage is always the best option if you can afford it.

Talk to an auto insurance agent

Talking to an auto insurance agent is the best way to find the answers to your questions and receive advice. You can contact an agent of your choice to learn more about your options. Then, you can buy the right policy for your needs. 

For more information about auto insurance policies, reach out to a local expert.