Aside from the legal requirements in most jurisdictions, having motor vehicle insurance for your car usually goes a long way in ensuring that you enjoy your ride. With so many options of vehicle coverage and a rarely ending number of insurance vendors all over the place, you can easily get confused or even frustrated when it comes to finding just what will work for you.
Liability and full-coverage are some of the most common motor vehicle insurance packages. With the two packages, there’s still a likelihood that you may get lost in all insurance jargon and end up paying for something you didn’t initially plan for.
In this article, you’ll find a breakdown of all that’s entailed in the insurance covers and understand what comes in the fine print when you sign up for that motor vehicle insurance.
The Main Types of Motor Vehicle Insurance Coverage
Before we get into liability and full-coverage motor vehicle insurance, here’s a highlight of some of the other common car insurance packages offered by insurance vendors all over.
- Medical Payments Coverage
This comes into effect if or when you or any of the passengers on the insured car are injured in a road accident that the car is involved in. In some states, medical payments insurance is mandatory while it’s optional in other states. The extent of the costs that are covered in the insurance is dependent on the service provider, but some include surgeries, hospital visits, and X-rays. - Collision Coverage
Collision coverage covers all damages that may be because of a collision with the insured vehicle. Most insurers pay for repairs up to the actual cash value of the damaged object. With most vehicle lenders or leaseholders, collision coverage is mandatory, but it’s otherwise an optional cover. - Personal Injury Protection
This cover is available with several insurance service providers, and it’s in a way a comprehensive version of the medical payment’s coverage. In the event of an injury incurred while in the insured car, personal injury protection will not only help with the medical expenses, but it’ll also cater for other expenses like loss of income that may be because of your injuries. - Comprehensive Insurance
Comprehensive insurance covers all the harms that come to your car that are not a result of collisions. The instances in which comprehensive coverage will come into play include repairs to your car due to natural disasters, theft, vandalism, and harm due to animals.
Liability and Full-coverage Insurance on a Car
Liability Insurance on a Car
Mandatory in most states and other jurisdictions, liability insurance coverage on a motor vehicle is probably the barest minimum available when it comes to insuring your car.
A liability insurance covers damage to a 3rd party in which you are liable.
A liability insurance cover on cars is mandatory in most if not all jurisdictions because it’s a form of keeping motor vehicle owners accountable for the damages or harms they bring upon others.
Liability insurance for motor vehicles is aptly subdivided into property damage liability and bodily injury liability.
When you’re involved in an accident, that is your fault, and someone is injured, but you’re injured as well, a liability insurance cover will cater for their medical expenses and not your own. The same applies for property damage that may be incurred due to the insured car, a liability cover will repay for the property damage and not the damages to your car.
Whether or not the state you’re in has a mandatory requirement for having an insurance cover, you’re still liable for any damages or injuries you may cause to others while in your car. In such instances, lack of insurance cover would mean that you personally cater for the injuries or damages. While this is an option, it’s often way too expensive and riddled with multiple legal hurdles.
Full-Coverage Insurance on a Car
Contrary to popular belief, full-coverage car insurance is not an insurance term. This is a lienholder’s term. What “Full Coverage” is typically referring to is the collision coverage and comprehensive or other than collision coverage. These are the coverages that protect your vehicle in any type of collision or damages other than collision.
Full coverage can be thought of as a cover for your car as well as the property of other road users and themselves. With most insurance service providers, a full-coverage insurance package will pay for damages equal to the actual cash value at the time of the damage being incurred.
A key factor when doing a valuation for the insurance payout is the depreciation costs of your motor vehicle. Factors such as wear and tear, age of vehicle and mileage will go a long way in determining your vehicle’s current price from the actual price at purchase.
Is It Worth It to Have Full coverage on a Car?
Depending on the value of your car, it may be more practical to have a combination of the different packages that make up a full coverage, rather than going for the consolidated policy. To determine which route will be the most practical for your situation, we recommend that you sample through different available packages from the same or different vendors and try out different iterations.
Switching from Full coverage to Liability Insurance for a Car
The older your car gets, the more it depreciates in value. With an older car, it isn’t always practical to pay for a full coverage since depreciation will be the main factor when determining the payout amount.
Switching to liability insurance from a full coverage after about eight to ten years is a good time, but these figures would vary depending on other factors like the wear and tear and the mileage of your car, along with the amount of premium you are paying for these coverages.
