If you are a first-time driver, locating reasonable auto insurance can be one of the major challenges after the initial purchase of your car. There is no shortage of car insurance companies standing ready to offer you competitive rates as well as different kinds of insurance policies. There are two types that are most readily used by motorists: liability and full coverage. These two types of coverage represent the bottom line. Any other particulars of certain policies are built off of these. What are some of the differences? Is one better than the other?
Each state has its own guidelines and specific provisions that govern the use of car insurance. The regulations declare what minimum amount coverage is required by law. If you want to drive legal in most of the states, you will need liability insurance coverage. Liability insurance coverage provides the motorist protection against damage and injuries which were caused by you, including property damage.
This type of coverage is described in terms of numbers. Each of these numbers represents the components of the liability coverage. They are written like so: 20/60/10. The first number is the maximum amount your insurance company will pay to cover bodily injuries sustained by a single person, per accident. The second is the maximum amount that your insurance provider will pay for every injury caused by a single accident. The third number is the total amount that will be paid to cover property damage.
With full coverage you have far more provisions available to you. Yet there is a misconception that if you have “full” coverage, that all circumstances will be covered. This is not true. Full coverage includes two additional areas or components of insurance coverage besides liability called collision and comprehensive. Full coverage has a degree of flexibility about it. You do not necessary need both of these additional components. For example, comprehensive can be added by itself. In order to have to collision coverage you must have comprehensive.
With comprehensive coverage you have protection against other forms of damage such as those that come from natural disasters, fire, vandalism, and theft. For those who add collision coverage, they do so because they want protection in auto collisions.
There are clear differences between liability and full coverage. What type you decide to purchase depends on different factors like whether your car or truck is new, used, or under financing. It may also be a matter of how much coverage you want to buy. The costs will be higher if you opt for fuller coverage rather straight liability. If there are other features or special areas of coverage provided by the individual auto insurance provider, you may decided to pay for some parts but not others.
It is important to understand what type of coverage you need as well have a working knowledge of other types of coverage available and what each one offers you, the motorist.
