Insurance is not always easy to understand, and many people end up choosing the wrong types of coverage because they do not know what types to pick. The two main options you have when buying auto insurance are liability-only policies and full-coverage plans. If you can understand the differences between these two options, you will likely choose the right coverage for your needs. Here are three of the leading differences between liability and full-coverage insurance policies.
The Protection Each Offers
The primary difference between these types of insurance is the protection you receive. If you buy a liability-only policy, you have a plan that protects others. This plan covers the costs of damages to other drivers if you cause an accident while driving. For example, if you pull out in front of a car and the car hits you, you would be the at-fault driver. In this case, your policy would pay for the repairs and medical bills for the other driver.
A full-coverage policy protects you in situations like these. Instead of only covering the person you struck with your vehicle, your policy would also pay for your car repairs. Full-coverage provides more protection than liability-only policies.
The second difference you will see is the costs. You can expect to pay more for a full-coverage policy because you receive more coverage through it. Therefore, if you want a low-cost policy, you might want to stick with a liability-only policy. If you want sufficient coverage and lower risks, you will benefit from a full-coverage plan. The amount of money you can save by choosing liability-only varies, but you can contact an auto insurance company to find out.
The Legal Requirements for Car Owners
The other difference to understand is the legal requirements for car owners. Anyone who has a car loan on their vehicle has different rules than a person who owns their car outright. When you own your car outright, you can choose any type of coverage you want. If you have a lender, you must choose the coverage types they require. Almost all car lenders require full-coverage policies. Therefore, you must follow this rule while you have an outstanding loan on your car.
As you can see, there are major differences between liability coverage and full-coverage policies. If you have further questions or need advice about the protection you need, contact a local auto insurance agent.