Full Coverage vs. Liability Only Insurance

Please note: the following is not legal advice. Do not assume the facts herein are applicable to your case without talking to a lawyer. Each case is unique and results depend on a variety of factors. For more information see the full disclaimer below the article.

In these hard economic times, many people attempt to save money by cutting back on certain services, including full coverage car insurance, opting instead for the minimum amount they can get while still being legal.  As with all decisions, there are risks and benefits, such as price versus peace of mind.


There are many reasons people choose state minimum insurance coverage, the most common of which include owning an older or less expensive vehicle; driving infrequency; and lower insurance costs.  For some people, it is fine, but others may be playing a dangerous game of road roulette that could cost them significantly in the long run.  The following are a few of the benefits of opting for full coverage insurance, as well as some risks associated with not opting for full coverage insurance to help you make an informed decision and make the right choice for you:


  • Benefit - If your car is damaged in a collision, you can file a claim against your own insurance and, if the collision is not your fault, your insurance company will go after the at-fault party, while fixing your car (your deductible will apply) and getting you into a rental car (if you opt for rental coverage on your policy).  Your insurance company will also seek reimbursement of your deductible from the at-fault party’s insurance company, which would then be paid to you directly.


  • Risk - If you don't have full coverage, you are on your own to pay for the repairs to your own vehicle; and then have to fight the other insurance company or sue the driver personally for reimbursement of your repair and rental expenses. It can take months or even years to see that money come back to you.


  • Benefit – If your vehicle is damaged in a collision and has to be towed to a storage facility pending inspection and repair, your own insurance will pay any towing and administrative charges (often in excess of $200) and storage fees (often $50 per day) to the towing facility; and will pick up your vehicle from the towing facility and take it to the repair shop of your choice.


  • Risk – If you don’t have full coverage, you are on your own to pay for the towing, administrative, and storage fees charged by the towing facility prior to them releasing your vehicle to you; and in addition, will be required to pay the additional towing expenses to remove your vehicle from the towing facility and take it to your chosen repair location.


It could be said that car insurance is like life because you hope for the best but try to be prepared for the worst.  Since Murphy’s Law states, “anything that can go wrong, will go wrong,” you might be best served by covering as many possibilities as you can when selecting car insurance coverage.

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