{"id":288,"date":"2022-11-08T13:45:59","date_gmt":"2022-11-08T14:45:59","guid":{"rendered":"https:\/\/lapazattorney.com\/?p=288"},"modified":"2025-02-14T14:55:00","modified_gmt":"2025-02-14T14:55:00","slug":"full-coverage-vs-liability-only","status":"publish","type":"post","link":"https:\/\/lapazattorney.com\/index.php\/2022\/11\/08\/full-coverage-vs-liability-only\/","title":{"rendered":"Full coverage vs liability only"},"content":{"rendered":"

Insurance coverage is something that everyone needs but that few people feel they fully understand. You\u2019ve probably heard of full coverage or liability-only auto insurance<\/a>, but may have some questions on which is best for you. Doing your own research can provide you with an abundance of information but no real guidance. Unfortunately, even turning to the experts (the insurance companies) is often confusing. Too many companies prioritize sales over individualized solutions and customer understanding, which can leave you feeling overwhelmed and more than a little disappointed. At Elephant Insurance<\/a>, we do things differently. We want you to be an active partner in your insurance planning, and we aim to foster your understanding and involvement every step of the way. With our helpful representatives, free quote-finder tool, simple car insurance explanations<\/a>, and informative articles, we make sure you\u2019re never in the dark.<\/p>\n

One common area of confusion for car insurance<\/a> customers is full coverage vs liability only. Below, we\u2019ll go through explanations of both, the differences between the two, comparing liability and full coverage. We will help you determine which option is right for you.<\/p>\n

What is liability coverage?<\/strong><\/h2>\n

Liability coverage<\/a>, also known as liability-only car insurance<\/a>, covers other people\u2019s injuries and property damage should the policyholder cause an accident. In other words, if you screw up, liability insurance makes sure that other people don\u2019t pay the price.<\/p>\n

This doesn\u2019t mean that liability coverage doesn\u2019t do anything for you though. It ensures that other people don\u2019t have to pay out of pocket for their medical bills or repair expenses. It makes sure that you aren\u2019t on the hook for those costs, either. So, liability insurance offers financial protection for you and for others \u2014 that\u2019s a win-win!<\/p>\n

Liability insurance is sometimes referred to as third-party coverage and is often broken down into two main categories: Bodily injury liability insurance<\/strong> and property damage liability insurance<\/strong>.<\/p>\n

Bodily injury liability coverage<\/strong><\/h3>\n

Bodily injury liability insurance, or BI for short, makes life a whole lot easier for other parties involved in a car accident if you were at fault by providing bodily injury liability coverage. This type of liability coverage takes care of loss of income, medical bills, legal fees, pain and suffering, and, in a worst-case scenario, funeral costs for the injured parties. \u201cInjured parties\u201d in this case can refer to the other driver and their passengers, as well as any bystanders or pedestrians who were injured because of the accident.<\/p>\n

BI insurance, like many other types of car insurance<\/a>, comes with a coverage limit. In this case, there are two coverage limits: the maximum amount your insurer will pay per person for each person involved in the accident, and the maximum total amount your insurer will pay overall. BI insurance limits are often written in the following format:<\/p>\n

Bodily injury liability maximum per person payment and maximum total payment per accident<\/strong><\/h3>\n

So, if you choose limits of $25,000 per person and $50,000 total for your bodily injury policy, those limits would be written as $25,000\/$50,000. The exact limits will vary based on your needs, but the second number almost always refers to the maximum your insurer will pay in total (if you forget, just remember that this will be the larger number).<\/p>\n

Let’s take a hypothetical look at bodily injury insurance in action. Say you’re on your way home from a long day at work, you’re tired, and your reflexes aren’t exactly at their sharpest. You’re a little too slow on the brakes when the car in front of you stops at a stop sign, and BAM! you ram into their bumper.<\/p>\n

Everyone is pretty much okay, but the driver and each of their three passengers all go to the doctor to get checked out. After the initial appointments and treatment costs, the driver’s bill comes out to $15,000, and each of the three passengers medical bills amount to $20,000.<\/p>\n

Since your insurance carries the $25,000\/$50,000 bodily liability insurance limits we mentioned earlier, it’s easy to assume all four of those bills are covered. No individual bill exceeds $25,000, so you’d think insurance would cover the costs. You’re all good on that front\u2026but will your insurance pay for the total cost of the accident?<\/p>\n

Unfortunately, no. Since your maximum payout limit is set at $50,000 and the total medical expenses for the four occupants of the other vehicle clocks in at $75,000, you’re now on the hook for a whopping $25,000. Yikes!<\/p>\n

Almost every state has a\u00a0required minimum<\/strong><\/a>\u00a0limit for bodily liability insurance, but as the example above shows, low limits are not your friend. In this case, low limits equal low coverage, and without more financial protection, that can be a major pain in your wallet.<\/p>\n

Property damage liability insurance<\/strong><\/h3>\n

Property damage liability insurance, or PD, is a bit less complicated and refers to property damage liability coverage. There\u2019s only one limit to worry about, and it refers to the amount that your insurance company will pay towards the other party\u2019s car repair costs if you cause an accident.<\/p>\n

Property damage liability maximum per person payment and maximum total payment per accident<\/strong><\/h3>\n

This is the third number that will be tacked onto the limit format we talked about above. In the earlier example, if you also had a property damage limit of $20,000, that would all be written as $25,000\/$50,000\/$20,000. So, if the repair bill for the car you hit in the above example only comes to $3,500, your policy will cover the entire cost.<\/p>\n

One of the key differences between full coverage insurance and liability only insurance is that in the event of a car accident, a policy with only liability coverage does not carry any necessary coverage to pay for repairs to the insured vehicle itself.<\/p>\n

What is full coverage?<\/strong><\/h2>\n

Having full coverage auto insurance means having several different coverage levels that combine to provide you with a broad scope of protection. No insurance policy can protect you in every possible circumstance, but full coverage comes the closest. A full coverage car insurance<\/a> policy generally includes liability insurance (which we explained above), comprehensive coverage<\/a> and collision coverage.<\/p>\n

Definition of full coverage car insurance<\/strong><\/h2>\n

Full coverage car insurance is a type of car insurance that provides comprehensive protection for your vehicle and passengers. It typically includes liability insurance, comprehensive insurance, and collision insurance. Comprehensive insurance covers damage to your vehicle from non-collision events such as theft, vandalism, or natural disasters, while collision insurance covers damage to your vehicle from accidents or collisions. Full coverage car insurance may also include additional features such as roadside assistance<\/a> and rental car coverage.<\/p>\n

Comprehensive coverage<\/strong><\/h3>\n

Comprehensive coverage covers damage to your vehicle that isn\u2019t due to an accident. For example, if someone clips your bumper, a thief breaks your windows, or a tree branch falls on your car in a windstorm, comprehensive coverage will take care of the repair costs. Additionally, full coverage can include options like medical payments coverage to cover medical expenses for you and your passengers.<\/p>\n

Collision coverage<\/strong><\/h3>\n

Where comprehensive coverage takes care of repair expenses for damage to your vehicle while it’s parked, collision coverage covers damage to your car while it’s in motion. This means that it takes care of your repair costs after an accident, no matter who caused it. In the earlier example we went through, collision coverage would pay for the damage to your car even though you were at fault. Collision coverage would also pay for your repairs if you were to run into a guardrail or a light post, for example.<\/p>\n

In general, where liability insurance handles the damage you may cause to another vehicle, comprehensive and collision coverage address damages to your own car.<\/p>\n

Key differences between liability and full coverage<\/strong><\/h2>\n

The key differences between liability and full coverage car insurance are:<\/p>\n