If you are involved in a car accident or your vehicle is damaged from a natural disaster, your insurance company will pay for some or all of the damages incurred. The extent of damages covered by your insurance policy will depend on the type of auto insurance coverage you have.
Rates for liability insurance and comprehensive auto insurance vary significantly from state to state, and also by auto insurance provider. You will need to choose a policy that best meets your needs and budget, and understanding what each type of insurance covers will help you make the most informed decision.
Here’s a close look at both liability and comprehensive auto insurance options:
How Liability Insurance Works
When you have liability insurance, your insurance company will pay for some types of damages and injuries. It’s important to remember that this type of auto insurance policy does not cover the costs of repairs or replacement of your own vehicle. You will need collision insurance to receive any type of compensation for your car, truck or motorcycle in case you are at fault in an accident. Liability insurance will pay for the other driver’s losses and injuries, and having this type of insurance policy can prevent a costly court battle.
Liability insurance coverage will pay for property damage and bodily injuries, and you may be responsible for paying a portion of the costs based on the limits on your policy. A higher limit may mean a more expensive policy, but it also means you will be paying less out-of-pocket expenses if you are involved in an accident.
How Comprehensive Auto Insurance Works
Comprehensive auto insurance typically covers the cost of damages associated with a fire, vandalism, natural disasters, “acts of God” and theft. This type of insurance coverage does not cover any damages from a car accident, so you will need to purchase it in addition to your liability or collision car insurance policy.
People who purchase “full coverage” insurance are actually buying a comprehensive and collision insurance package. Buying full coverage insurance means you will be compensated for all types of damages other than collision damages, as well as the costs associated with being in an accident. The amount of compensation you receive will depend on the deductible on your insurance policy.
You can purchase additional types of coverage with a comprehensive auto insurance policy. Some insurance providers offer coverage options for towing expenses, uninsured motorist coverage, auto glass replacement coverage and may also pay for the cost of a rental car. Rates for these additional coverage options vary by insurance provider.
Whether you own a car, truck or motorcycle, it’s important to carry auto insurance that will pay for some or all of the costs in the event of an accident, theft or a natural disaster. Consider the benefits of having liability and comprehensive auto insurance so that you can make the most informed decision.
“What Is Comprehensive Auto Insurance?” Insure Lane.
“Full Coverage Vs. Liability – Which Is Better,” CarInsuranceRates.com.
“Liability Vs. Full Coverage Auto Insurance,” CheapAutoInsurance.com.