What is better for you – liability or the full coverage?
Liability and Full coverage can be viewed as two opposite ends of the car insurance spectrum but in reality those two aren’t the only ones that make the car insurance what it is. There are many steps to take and level to go though. But you know nothing about the car insurance until you figured out the difference between those two standing opposite each other.
Liability car insurance
It is no news that the car insurance coverage is regulated by the state. And each state has its own vision of the amount of coverage citizens need. But there are matching points. Every US state has a clear view about the minimum amount of liability coverage you have to have in order to legally drive your automobile. What let’s sort the definition out first. What is the liability? It is the insurance that covers caused to other people and their belongings by you (outside of your car).
The minimums of the state are expressed on the tree levels. Let’s take a look at one of the states and clarify it. Colorado’s legal minimums are 25/50/15. What do those numbers mean? The first number 25 refers to the amount the insurance company will pay for each individual in case of the injury per each accident that took place. The second number 50, refers to the maximum amount the insurer will pay for all the injured people together per one accident that took place. And the third number 15, is the amount the insurance company will pay for property damage for a single accident. So it makes Colorado citizens sure that they get $25.000 bodily coverage per victim, $50.000 bodily injury per accident for everybody harmed and $15.000 worth property damage coverage per one accident.
Please remember that each state is different. By looking at Colorado example, if you were in an accident that caused $100,000 in bodily injury damages to another motorist, your insurance would only cover the first $25,000. For the other $75,000 the injured motorist could come after you! This may or may not be the case with the “no-fault” states but you must know that those states count only 12.
Full coverage car insurance
Full coverage is a mixture of two components – comprehensive coverage and collision coverage. They are usually on top of liability. You can choose to have a comprehensive coverage without the collision but not vice versa. A car insurance policy that includes liability and comprehensive coverage is like something that lies in between the legal minimum and “full coverage” as we call it.
As we all know by now, comprehensive coverage is “other-than-collision” coverage, shortly called OTC. Logically we do understand that it covers damages to your car caused by something other than a collision. Theft, fire, weather damage can be viewed as good examples but sometimes insurance companies want to include accidents with animals to this coverage too and do not accept it as collision. The only logical explanation to it is that comprehensive coverage is meant to cover things that you aren’t likely to be blamed for. Collision coverage is a matter of choice add-on to comprehensive – although it isn’t optional if you still owe money on your car! Finance companies require borrowers to carry full car insurance coverage on their cars rather than anything else.
You own your money – Spend it good!
Most of us think car insurance is an expense that hardly justifies itself. Of course, it is the words of those who drive carefully. In reality one should know the importance of the car insurance. It doesn’t really matter that you choose – full coverage, liability or something else, as long as you feel comfortable and protected with it. You should also make sure your plan is worth your money. It would be silly just to keep no throwing money in the bin. The best possible way of comparing insurance plans and making sure you get what you really wanted with your money is to shop online. This is one secure way of spending less than you are supposed to and taking as long as you need with it.