Which Auto Insurance Coverage Should You Choose?

May 14, 2008

For new drivers, the first challenge they face is locating affordable automobile insurance. There are many car insurance companies on the market that are available to provide various types of coverage at competitive rates. Yet, there are two basic types of insurance coverage that are chosen by motorists. They are liability and full coverage. These are the types of policies from which other specific policies are created, based upon the needs of the individual. The question many have is whether one is better than the other is.

Car insurance coverage is something that is decided by the individual state. There will be different provisions and state-mandated guidelines that govern these policies and the ones that provide coverage as well. One of the factors that are determined by state policy is the minimum amount of coverage allowable by law. This minimum, in most states, is liability insurance.

Liability insurance coverage provides legal protection for the motorist against damage and injuries, which were caused by them, including property damage. When you are looking at figures for liability coverage, you will often see three number separated by slashes. These numbers are used to represent the components of the liability coverage. For example, if you have 20/60/10, the first number is the maximum amount the insurance company will pay to cover bodily injuries suffered by a single person, with each accident. The second number is total amount that the insurance provider will pay for every injury caused by a single accident. Finally, the third number will be the total amount, which must be paid in order to cover property damage.

Full coverage involves coverage that is more comprehensive. This does not mean that every situation will be afforded protection by the policy. In this sense, full does not mean complete. With full coverage, the policyholder is getting additional areas of coverage besides basic liability. These coverage types are called collision and comprehensive. If you decide to get full coverage, you are not obligated to obtain all three components. Some policies allow you to get comprehensive while omitting collision. At the same, time if you want to have collision, you must have comprehensive.

What are comprehensive and collision coverage? Comprehensive provides protection from other types of damage like natural disasters, vandalism, theft, etc. Collision provides extra protection in auto collisions.

As you can see, there are some distinct difference between full coverage and liability. You will find out that the type you must have will be based upon what sort of vehicle you have, whether it is new or used, and whether you want a certain amount of coverage. The coverage will be more expensive if you choose full coverage; there is no doubt about that. There are other factors that will help to shape the decision you make about car insurance. Affordability will be one of the top priorities as well as whether you can choose the minimum or you’re compelled to provide extensive coverage by lenders.

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