Sometimes you just don’t have a choice on the auto insurance coverages you have to carry. Sometimes your situations will dictate what insurance coverages you must have.
You know that if you own a car, you must have auto insurance or you’re breaking the law. But you’re not too clear about what insurance you need…full coverage or liability car insurance?
You know that if you have an auto loan you need car insurance, but you’re not too clear about what coverages. And if you have a leased car, you need insurance too, but what coverage and how much…full coverage or liability only?
Before you get a car insurance estimate you want to know what insurance coverages you’ll need. Let’s explain the differences between full coverage and liability car insurance.
What Kind Of Insurance Coverages Do You Need?
The Law – Liability Only
- To satisfy the law you need to at least carry liability insurance on any car that you own and operate.
- Liability only coverage will cost less than full coverage.
- Liability only doesn’t offer the complete package of coverages that full coverage offers.
- Liability just pays for the other persons car and bodily injuries as the result of a car accident.
- Liability insurance coverage does not pay for your car or your bodily injuries.
- You would have to carry full coverage to have your car and your bodily injuries paid for.
Loans & Leases – Full Coverage
- If you have a loan on your car, the loan company will require full coverage.
- If you lease your car, the leasing company will require you to carry full coverage.
- Since the loan and or leasing company owns your car while the loan is out or you carry the lease on it, they want to make sure it gets the best repairs available if you wreck it.
- After you pay the loan off or end the lease, you can drop down to liability only, if you choose to.
- But why would you want to carry only liability when full coverage offers more coverages.
- Full coverage includes comprehensive, collision, liability, medical expenses and uninsured motorist coverage.
- Comprehensive will pay for damages to your car if it is keyed, stolen, has a cracked windshield or you hit a deer.
- Collision pays for your car if you are in a car accident.
- Medical expense pays for your bodily injuries from a car accident.
- Liability pays for damages to the other persons car and bodily injuries as the result of a car accident.
- Uninsured motorist coverages pay for your car and bodily injuries if the other person does not carry car insurance.
Older Cars – Sometimes Liability Only
- If you have an older car, the cost of full coverage may not be worth it.
- Do the math to determine if the premiums you pay every year for full coverage on an older car are more or less than the amount you would receive from a claim check.
- Older cars, maybe 10 years or more, sometimes just carry liability only, not full coverage.
Call your car insurance agent for a review of your car insurance requirements and coverages. The last thing you want is to be surprised at the time of a claim because you assumed that you had a coverage that you did not have.