When choosing the best auto insurance for you, it is important to consider the different types of coverage available and the coverage you need. One of the first decisions you need to make is whether you want liability insurance or full coverage. In other words, liability insurance pays for the damage you do to others, while full coverage plans cover all liability and property damage to your car.
Surex works with the best Nova Scotia auto insurers to bring you up to ten great value auto insurance quotes in minutes. Our guide clarifies the distinction between liability and fully comprehensive insurance and helps you assess how much protection you need.
Liability insurance versus fully comprehensive insurance
When you drive, your liability insurance covers damage to other cars and injury to others. Liability insurance is included in fully comprehensive insurance and offers additional coverage for damage to your car. Most countries require you to have car insurance, although the minimum insurance requirements are generally limited to liability insurance. Full coverage – a collective term for guidelines that cover extensive damage and crash damage – is never required by state law. It may be required by your lender when you lease or finance your vehicle.
Understand liability insurance
Many states offer liability insurance that covers the cost of damage and injury to others you have caused in an accident. In other words, liability insurance does not cover damage to your vehicle or personal injury – only damage to people for whom you are legally responsible. There are two forms of liability insurance: liability for personal injury and liability for property damage. If you were responsible for the accident, Personal Injury Compensation will compensate for the injury to the other person up to the limits of the policy.
Typically, policy limits are represented by two numbers:
- The maximum amount that can be charged per person who was involved in a car accident.
- The amount paid for the entire accident.
The total is usually twice the maximum per person. For example, a policy might limit compensation to $ 15,000 per injured person and $ 30,000 for all injured people. If you are at fault, property damage compensation covers damage to other cars – or property. This form of coverage is a single dollar amount that reflects the maximum payout per accident. However, this does not include damage to your car. If you live in a state that does not require car insurance, you will still be financially liable for breakdowns or property damage caused by an accident. For this reason, we recommend that you take out insurance.
Basics of fully comprehensive insurance
The total coverage of a policy doesn't mean that it has all the bells and whistles. This term applies to insurance plans that provide liability, casualty, and full coverage. Collision insurance protects you if your car is hit by another vehicle or object while you are driving, regardless of who is to blame. Collision coverage is usually not accidentally available and must be purchased in conjunction with comprehensive coverage. Accidents without collision such as arson, theft and damage caused by nature, natural disasters, falling objects and animals are covered by fully comprehensive insurance.
Collision and fully comprehensive insurance covers damage to the vehicle up to its current market value. After the depreciation costs such as wear and tear have been deducted from the original purchase price of the vehicle, the actual cash value is calculated. Although not every state requires full coverage, it is often required by your lender when you lease or finance your vehicle. You are responsible for paying the deductible charges, which for fully comprehensive and collision insurance can vary from $ 250 to $ 1,000.
What is preferable – fully comprehensive or liability insurance?
Liability insurance is already included in full insurance plans. So you have to decide whether comprehensive and collision-proof insurance will help you. If the value of your vehicle outweighs the cost of adding full and accident-related coverage to your policy, we recommend maximum coverage. Factors to consider when deciding whether to take out full or just liability insurance:
1. When is it appropriate to take out only liability insurance instead of full coverage?
As a rule, state laws only prescribe minimum liability insurance. Full coverage is not required. However, if your car is leased or financed, the bank or dealer can arrange for you to take out fully comprehensive insurance. This protects the lender as you can restore the collateral on the loan (your car). You are not required to have full coverage once you fully own your car. If you have a newer car or a car that is still worth a lot of money, full coverage can be worth the money to protect you from high repair costs after an accident.
2. Is full coverage worth the additional cost if not required?
The cost difference between liability and fully comprehensive insurance can be considerable. Although minimum liability insurance is often cheaper, full coverage will protect you from the cost of damage to your vehicle, as well as damage to others.
3. How can you tell if your car is valuable enough to get maximum coverage?
The amount of coverage you need depends primarily on the value of your vehicle. The value of your car is determined by age, mileage, and general wear and tear. Insurers use their methods to measure the value of a used car and it is unlikely that you can determine the value of your vehicle yourself.
To minimize risk and maximize returns, car owners should choose the best auto insurance plans available. The cheapest alternative is compulsory liability insurance, which however does not protect the interests of the policyholder. As a result, the insurance policy should be selected based on the make and model of the vehicle, the frequency of use, the venue and other factors. You can choose the right car insurance policy by contrasting and reviewing different types of coverage.