Liability Coverage Is Not Enough

Leave it to an insurance blog to tell you that minimal liability car insurance coverage is not enough. But – really – you do yourself a disservice by limiting your car insurance policy to just liability coverage. While most states require only liability coverage, by not opting for full coverage you can be putting your savings and even your paycheck at risk.

What is liability coverage?

Liability car insurance is focused on damages to third party (not your) persons or property. Typically, there will be two areas of coverage included under a liability policy – bodily injury liability and property damage liability. When you are deemed “at fault” in an accident, liability insurance will pay for the other driver’s costs up to the covered limit. Because liability insurance is limited to other drivers, you will be on your own for any damages sustained to you or your car.

Is it better to have full coverage or liability?

Carrying the minimum requirement of liability insurance, while cheaper, could wind up costing you more in the long run. Over the past decade, medical costs as well as the cost to repair vehicles have continued to rise. If you only have liability insurance, you could find yourself required to pay out-of-pocket to cover your expenses incurred during an accident.

Full Coverage Insurance, however, not only protects other cars and persons, but you and your car as well. Adding comprehensive coverage and collision coverage to your car insurance package ensures you are fully covered in the case of an accident – even one that is your fault. The best way to determine if a full coverage policy is right for you is to calculate the value of your vehicle. If it is worth more than the yearly payments for a full-coverage policy plus the deductible, full coverage is your best bet.

What if my car is “totaled” and I only have liability coverage?

Picture this, you’re in an accident and your car is a total loss. If you are carrying only the state-minimum liability insurance, you are on the hook for all the bills associated with replacing your vehicle. If you’re at fault for this hypothetical accident, the only way to make an insurance claim for your vehicle damage or total loss is if you already have collision coverage. Even when you own your car outright, if you can’t afford to replace it in the event it gets totaled, you need to consider full coverage.

Can your wages be garnished for an auto accident?

This is where the level of insurance you carry really comes in to play. If you are involved in an accident and found to be at fault, your insurance company is responsible for restitution for the other parties involved. If your policy is limited or is unable to fully cover the auto damage and/or medical bills, you are liable for those costs. It may be an extreme case, but in addition to garnishing your bank accounts, your wages can also be garnished – up to 24% of your paycheck. Is that worth the risk from skimping on your insurance?

Liability coverage is not enough

State-minimum auto liability insurance is a must but additional coverages are recommended not only for peace of mind but to protect your savings and future wages.  If you want your insurance company to help replace a totaled car you are going to want collision, comprehensive, or new car replacement coverage. Depending on how much your vehicle is worth, it could make sense to have full coverage.

If you are looking for more details about the importance of carrying auto insurance beyond liability, contact our office: