We all know how tempting it is to try to save money on auto insurance or to look for the cheapest car insurance plan out there. Driving can be expensive enough when you factor in fuel costs, parking, and basic maintenance.
Insurance is one expense where many of us try to cut costs. Unfortunately, one car accident could destroy your finances if you don’t have the proper insurance.
This is why I wanted to look at full coverage vs liability car insurance to see what’s ideal for your situation when it comes auto insurance and saving money.
As you get older, you realize that you have to spend money on the different types of insurance (renters insurance comes to mind too). You’re not sure if you should cut costs or try to pay for the best possible insurance.
I’m going to help you make an informed decision on full coverage vs liability car insurance.
Here’s a common scenario when it comes to auto insurance:
You finally got that car after saving up for a long time. You were fed up with taking public transit or you just wanted an upgrade to your daily commute. You’re excited to be on the road. You’re just not too fond of all of these new expenses that you’ve incurred.
You’re not sure if you should go with full coverage or liability car insurance. You want to save money, but you know how important car insurance is. This is why we’re going to compare full coverage vs liability car insurance.
Liability vs full coverage auto insurance: What you need to know.
What are the differences between both types of auto insurance coverage? Is it all about saving money? Does it matter which option you go with?
We turned to the experts to try to find the best definitions possible of both types of auto insurance.
The team at Cover explained liability vs full coverage as succinctly as possible:
“The difference between liability and full coverage is straightforward. Liability insures against the damage you could cause other people or their property while on the road. Full coverage applies to damage to your vehicle.”
According to Value Penguin, here’s the main difference between liability and full coverage auto insurance:
“Liability insurance will cover damage to other vehicles or injuries to other people when you’re driving. Full-coverage policies do include liability insurance, but also additional protection to cover damage to your own vehicle.”
As you can tell, there’s a major difference in the level of coverage that comes with the auto insurance that you go with.
We understand that money might be tight and that you’re not always going to be willing to spend a hefty chunk of change on auto insurance, especially if you’re driving an older vehicle.
Liability vs full coverage auto insurance coverage will come down to how much protection you want to pay for in the event that your car would be involved in an auto accident compared to how much you would be willing to cover damages on your own.
You can also assume that there will also be a major price difference that could impact your decision.
Which auto insurance coverage should you go with?
I realize that insurance isn’t the sexiest topic and we often want to save money because we feel like it’s an annoying expense.
Here’s the thing though: you want to protect yourself and your finances as you work towards more in life. This is why sometimes it’s worth spending the extra money on insurance coverage.
You want to make more money so that you can travel more and get more out of life. You want to cut costs so that you can treat yourself to a decent meal on the weekend at that new restaurant that just opened up.
I get that. I just want you to protect what you have.
One auto accident can destroy your finances completely.
I want you to think about this when it comes to auto insurance. I was in an accident before and it’s no joke. Someone rear-ended me at a stop sign and I had to go through the entire process of filing an auto insurance claim.
It was a stressful process that involved the following:
- Spending time in a police station to file the official report.
- Dealing with my insurance company about the fault and costs associated with the accident.
- Obtaining multiple quotes to estimate the damages done to my vehicle.
- Using a rental car to get around while the vehicle was worked on.
- Waiting on the insurance to respond at every stage.
The goal is to never have to file an auto insurance claim. In reality, things happen and you could find yourself with a damaged vehicle through no fault of your own.
Is full coverage auto insurance worth the cost?
You legally need to have liability coverage in most states just to get your car on the road.
Full coverage is a combination of collision coverage and comprehensive coverage. You have to spend more money on this type of auto insurance. You also get more protection.
When it comes to spending money on insurance, you always have to look at the risks and the costs associated with the purchase.
In the perfect world, you would have the best type of insurance that protects you in every possible way. In reality, this isn’t always possible. You have to weigh out the options.
Here’s what you should think about when it comes to full coverage auto insurance:
- The age of your vehicle. How long have you had this car for? Did you buy used? Is this just a starter car so that you can get around?
- The state of your vehicle. Only you know the wear and tear of your car.
- Your finances. Do you have money saved to replace your vehicle if something were to happen? How’s your savings account? Could you cover damages to your vehicle out-of-pocket?
Your OWN personal finance situation should be factored in before deciding on liability vs full coverage car insurance because it’s difficult to give a one-size-fits-all answer here.
The aforementioned article on Cover explains it best when it comes to full coverage car insurance:
“Generally, if a vehicle is getting close to ten years old, you might be better saving the money you would spend on full coverage to put towards being able to repair or replace the car yourself.”
You have to ask yourself if it’s worth spending the extra money on your vehicle to be protected or if you should just focus on saving money.
What did Reddit have to say about full coverage vs liability car insurance?
We looked through Reddit to find what regular folks were saying about full coverage vs liability car insurance. When you search up “Reddit full coverage vs liability car insurance” you find many interesting discussions on the topic.
User @biggyww wrote in the following succinct comment in this Reddit discussion about full coverage vs liability insurance:
“Liability will cover the damage you cause to someone else. Full coverage will cover the damage you cause to someone else, and the damage you cause to yourself. So, if you hit a deer with liability only, then your car is totalled and you get nothing from the insurance. If you hit a deer with full coverage, you get reimbursed for the cost to repair or replace your vehicle.”
That’s a perfect example and a scenario to consider depending on where you live. This also gives us a lot to think about.
How much is your cart worth to you? Can you replace your current vehicle if something were to happen?
Here’s another comment that we had to screenshot about full coverage vs liability coverage insurance.
That’s a very accurate point about your personal situation when it comes to choosing between full coverage vs liability car insurance. Nobody knows your situation better than you do.
We found another excellent comment from user @not_falling_down about liability vs full coverage insurance:
“If your car was totalled, could you afford to replace it with a car of similar age and condition, or make a down payment on something a bit newer?
If not, full coverage makes sense IMO; it doesn’t cost that much on an older vehicle, and will give you a boost toward replacing the car if it’s totalled, and will help pay for repairs.”
These are all important factors to consider when it comes to auto insurance coverage and how much you’re willing to spend on a monthly premium.
H2: How do you save money on auto insurance?
There are ways to save money on auto insurance. It’s easier than ever to find deals. We’ve written extensively about renters insurance policies so we know what it’s like to be looking for deals when it comes to insurance.
Let’s put the liability vs full coverage discussion aside for now and look at how to save money on auto insurance in general.
How can you save money on auto insurance?
- Shop around for quotes. You have many options and you can easily obtain multiple quotes in minutes.
- See if you’re eligible for any discounts. Does your company offer any discounts? Are you in any professional organizations?
- Increase your deductible. This will lower your premium.
- Bundle insurance policies. Can you combine insurance policies under one umbrella?
- Think twice about the type of vehicle that you purchase. YOUR car will determine how much you spend on your insurance rates.
- Maintain a decent credit score. How’s your credit score?
I took public transit for many years as a student. My life drastically changed when I finally started driving and could get around quicker. In most places, you still need a vehicle to get around. With convenience comes the hassle of dealing with the costs like insurance. This is why it’s important that you research the differences between full coverage and liability car insurance.
What type of auto insurance do you have? Do you have liability or full coverage auto insurance?