What Is The Difference Between Liability vs. Full Coverage Insurance?

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When it comes to insuring your car, there are a lot of options when picking the best kind of coverage for your situation. With more than 50 years in the business of auto insurance, many of our customers have asked us about the difference between liability vs. full coverage insurance. Just as there is no one single answer for the type of vehicle somebody should own, there is no “one size fits all” insurance plan for every motorist. Everyone has unique needs when it comes to car insurance and that is why the experts at United Auto Insurance are here to help you every step of the way. When it comes to liability vs. full coverage insurance, let’s look at these different types of policies and see which one will best suit your needs to give you peace of mind.

Liability Car Insurance (Or Liability Only) – Is It Required By Law?

Liability Insurance is also commonly known as liability only coverage and is legally required by law in both IL and IN. This type of insurance only covers you in an accident for the injuries that you cause to people and property outside of your car. Let’s look at an example. During a snow storm, you slide into another car at a traffic light, which causes that vehicle to hit a light pole. In this scenario, here is what would be covered under a liability only policy:

Damage to the other car? Yes
Injury to passengers in the other car? Yes
Light pole? Yes
Damage to your car? No
Your injuries? No
Your passenger's injuries No

 

If you are covered by a liability policy, your insurance will pay for the injuries to the people in the other car, damage to the other car and the light pole. However, it will not pay for injuries to you, your passengers or any damage to your own car. With liability only insurance, you would be personally responsible for these costs.

Full Coverage Car Insurance - Protect Damage To Your Vehicle

Even though full coverage is not a technical insurance term, it does a good job of describing this specific type of policy. Unlike liability, a full coverage car insurance policy provides liability, collision and comprehensive coverage to you. In other words, this type of insurance protects you in all aspects of your driving, including damage to your vehicle. In our accident example above, let’s take a look at how a full coverage car insurance policy would respond.

Damage to the other car? Yes
Injury to passengers in the other car? Yes
Light pole? Yes
Damage to your car? Yes
Your injuries? Yes
Your passenger's injuries Yes

 

As you can see, a full coverage policy offers you a lot more protection than a liability only plan.

What’s The Best Coverage For Me: Liability Or Full Coverage Insurance?

The answer to this question is going to be determined by your own unique situation. Full coverage auto insurance is more expensive than a liability only policy because it includes more benefits. As you think about what is the best policy for you, keep in mind that a mandatory minimum level of liability insurance is required by law in both Illinois and Indiana. With that said, here are some good guidelines regarding whether you need liability only or full coverage on your car.

Full Coverage Is Recommended When:

  • The car is financed by a bank or other lending institution. They will require full coverage because “technically” the car is still owned by the bank or lender.
  • You don’t want to be personally responsible for costs related to an accident (other than a deductible).
  • Your car is new and you want to protect it in case of damage or theft.
  • You want coverage for a broken windshield, hail damage or an animal hit (this is called comprehensive coverage).
  • Protection against your personal belongings being stolen from the car is important to you.
  • You want the peace of mind that comes with full insurance protection.

Liability Only Insurance Could Be An Option When:

  • You own the car outright – no bank or financing loan.
  • You are ok with potentially paying for damages to your car or injuries to passengers.
  • Your car is older and valued below a certain level, so repairs will be less expensive.
  • You only need a policy that meets state mandated, minimum requirements.

The Choice Is Yours

For over 50 years, United Auto Insurance has been your one stop shop for all your insurance needs. When it comes to liability vs. full coverage insurance, we are ready to help you find the perfect policy. Every day, we help thousands of people in the Chicagoland, Northwest Indiana area get the right insurance coverage. When you need assistance deciding on a liability vs. full coverage policy, give us a call and Get A Free Quote. We’ll get you covered with the right insurance plan for you.