There are many things to consider when purchasing auto insurance; you might wonder how different carriers charge premiums, apply deductibles, or set limits when you are setting up your policy. However, one of the most common questions that car owners have is whether they need more than liability coverage on their vehicles.
While at first it can seem like an intimidating decision, keep in mind that your insurance is meant to protect what matters to you. From there, your agent can collaborate with you to set up the right kind of coverage on your policy to protect you from the unexpected. When deciding what type of auto insurance to invest in, choose the coverage that is right for you.
What Is Liability Insurance?
Liability insurance is a coverage that applies if your carrier determines that you are at fault in a collision. If your insurance determines that you are at fault, they will cover the damage done to other people or property involved in the crash. This can include collisions with:
- Pedestrians
- Other cars
- Fences
- Road signage
- Residential or commercial buildings
There are two forms of liability coverage: bodily injury and property damage. Both forms are legally required on every registered vehicle in almost every state. However, the limits that are required in each state can vary. The minimum required limits in Idaho are:
- Bodily injury: $25,000 per person and $50,000 per accident
- Property damage: $15,000 per accident (See Idaho Department of Insurance for more information.)
What Is Full Coverage Insurance?
There are additional coverages available to protect you in case of an accident. Full coverage insurance includes liability insurance, along with:
- Collision coverage: Helps pay for damage done to your vehicle if you hit or get hit by another object (regardless of fault)
- Comprehensive coverage: Helps pay for your vehicle when it is damaged by something other than a collision, such as:
- Weather
- Theft
- Vandalism
- Hitting an animal
Liability, collision, and comprehensive coverage typically make up what is thought of as “full coverage” insurance.
When Do I Need Full Coverage?
Lenders will often require car owners to have full coverage on their vehicles in order to protect their investment. They require car owners to carry liability, comprehensive, and collision coverage whenever a vehicle is leased or financed so that there is coverage in case the vehicle is stolen or damaged.
Otherwise, it is up to you to determine whether you would like full coverage on your car. While it is not legally required, it could be beneficial in case of a collision, theft, or “acts of God,” such as hurricanes, windstorms, and tornadoes.
What Does Full Coverage Cost?
That depends. There are multiple things that influence the rates that are charged on auto policies, including:
- Age of the driver(s) on the policy:
- If a driver listed on your policy is inexperienced, they could contribute to your policy costing more, especially with full coverage. This is less likely with more experienced drivers.
- Year, make, and model of vehicle(s):
- Cars have varying costs in terms of replacement and repairs based on the model. Insurance carriers take this into account when determining rates.
- Driving history:
- Drivers with any kind of tickets are likely to have increased rates. If you are able to keep a clean driving record, you are likely to save money on your insurance premiums.
- Claims history:
- Frequency & severity of filed claims on your policy impact the amount you are charged for premium, especially if you are found at fault for the accidents involved. The more frequent and severe your claims are, the higher your rates will probably be.
- Deductibles:
- If you choose deductibles that are higher, your rates will likely be lower than they would be if you chose a lower deductible.
It is important to note that liability-only policies are less expensive than full coverage policies because you are paying for less coverage. When you have more coverage on your policy, your insurance takes a closer look at your experience as a driver in order to determine premium, and the rates are higher since you would receive more coverage in the case of a claim.
When Should I Choose to Get Full Coverage?
Imagine that while you are harvesting barley on a hot afternoon, chaff accumulates around the combine’s engine There are many benefits to having full coverage insurance. While your insurance premiums will be higher with full coverage, you are better protected against unpredictable circumstances if you have it. Full coverage is usually a fraction of the cost of replacing a used vehicle.
While liability coverage protects you against other parties coming after you for damage done to their property, that is the extent of that coverage. If you have full coverage, your carrier can help you repair your vehicle in any accident you may find yourself in, regardless of fault.
Real-Life Example: You Crashed!
Say that you are driving down an old road, and you approach a road intersecting with yours. There are no stop or yield signs next to the intersection. As you start to go through it, another car comes up from the left, and it crashes into the driver’s side fender of your vehicle. Even though the other driver was clearly speeding and you entered the intersection first, the other driver’s insurance determines that their insured is not at fault for the accident because their insured told them that they entered the uncontrolled intersection before you.
If you only had liability coverage on your policy, you would only be able to get your vehicle repaired if you could afford to pay out of pocket. You would be dependent on the other driver’s insurance to determine that their driver was responsible for the accident in order to get your repairs covered through the liability insurance on their policy.
However, if you had full coverage on your policy, you would be able to get your vehicle repaired, regardless of what the other party’s insurance determines. You would be able to fix your vehicle through your own policy after paying your deductible, and, if your carrier deems the other driver at fault, they would be able to pursue the other party’s insurance for what they paid on your behalf (along with your deductible) in a process called subrogation.
Frequently Asked Questions
Are there more coverages available than liability, collision, and comprehensive? Yes. There are available coverages that could assist with medical bills, provide roadside assistance and rental reimbursement, compensate for damages caused by uninsured or underinsured third parties, and more. Talk with an agent to discuss these coverages for your policy.
If I have an older car, can I get full coverage insurance? Yes. However, if the parts for potential repairs to your car are hard to come by or expensive to get, your premiums could be higher because of the car’s age. Your insurance may determine that an older car may is less reliable and more prone to accidents if it is older, so they may charge more to compensate for potential losses.
What kind of insurance is available for rental cars? Rental coverage may be available with the agency you are renting from, but your personal auto policy could offer similar coverages to your owned vehicles, including liability, collision, and comprehensive.
Do I pay a deductible if I get in an accident with a liability-only policy? No. If you have a liability-only policy and you are at fault for the accident, your carrier pays for the damage done to the other person and/or property without applying a deductible. If you have full coverage, you would have to pay your deductible to repair your own vehicle.
Final Takeaway
While liability insurance can be handy in protecting you from the effects of damages you caused, full coverage insurance can also take care of you and any damaged property you may have in an accident. It is important that you determine what coverages matter to you in your situation.
If you have questions about what kind of coverages are on your policy, a local agent can assist you.
External Resources: Idaho Department of Insurance
Disclaimer: The information included here is designed for informational purposes only. It is not legal, tax, financial or any other sort of advice, nor is it a substitute for such advice. The information may not apply to your specific situation. We have tried to make sure the information is accurate, but it could be outdated or even inaccurate in parts.
