Insurance: Between Full coverage and Liability

By Sanmi Fatoba

Sanmi Fatoba

There are two conditions for full coverage and liability. When you’re still making payment on car definitely you will have to get full coverage policy but if you’re not making payment and depending on the value of the car then liability will do. Preferably, for any car, $3,000 or less, liability will be fine.

Though there are people whose cars are valued more than $5,000 and they use liability coverage. 

That is a ‘no’ because it is not economically wise. When a car values more than $5,000 and it is a liability coverage, if anything happens to the car, like an accident and it is the fault of the owner, the insurance will not fix the car. The owner will lose. If the damage is major the money to fix the car will really be more.

If it is liability and the other car does not have insurance coverage, and the other person that has no insurance is at fault, then the responsibility for fixing the car will be borne by the owner of the car who has liability coverage.

But an addition that can be put in the policy if the owner cannot afford a full coverage is what is called ‘uninsured property damage and uninsured body injury.’ If it is uninsured body injury, the liability will cover the other person and not that of the policy holder but it covers the holder when the other person does not have insurance. That is if the owner of the liability policy is injured or in a situation he cannot go to work. 

For somebody with a car value of above $4,000 it is advisable to have uninsured property damage and uninsured body injury. This is in addition to the regular liability. However, it is ideal to have full coverage for any car more than $4,000 and above. 

What constitute full coverage include collision and comprehensive. Comprehensive alone means the car cannot be driven. It’s mostly for someone that is travelling and putting the car away in the garage. That means if the car is stolen or damaged it will be replaced or fixed. The basic coverage for every car is liability, which is step one. The addition include the collision and comprehensive.

Full coverage takes care of comprehensive and collision. The benefits of full coverage and liability are that if there is an accident the insurance will fix the car of that of the policy holder and the other if the policy holder was at fault which is done with the deductible payment. Deductible starts from about $100 and could go as high as $1,000. 

The rental and the tow are part of full coverage. If it is a liability insurance, there will not be a rental car. Though there are some insurance companies that can still provide towing with liability insurance. Rental is mainly a replacement of the car when it is stolen or damaged in an accident. Though some don’t add the rental to their full coverage because they have more than one car. It saves them some money. Liability cannot have such service.

Payment differentials could be determined by location, age (those below 25 pay more), neighborhood, type of car, credit and driving record. For example, one could pay less on full coverage having two cars than when it is one car. They know that one driver with two cars cannot drive the two same time. The other car is always there.