Liability only
Liability coverage pays for injuries and property damage you cause to other people when you're at fault. It also helps with legal defense if you're sued over a covered accident. It does not pay to fix or replace your own car.
Full coverage
“Full coverage” isn't an official policy type. It's shorthand for a policy with liability plus two coverages that protect your own car:
- Collision: your car after an accident, no matter who caused it
- Comprehensive: theft, weather, fire, animals and other non-crash damage
Other coverages to know
Whichever you choose, these coverages are often worth a look. Some are required in certain states.
- Uninsured and underinsured motorist: helps when the other driver can't pay
- Medical payments or personal injury protection: medical bills for you and your passengers
- Rental reimbursement and roadside help: often optional add-ons
When full coverage is required
If you have a car loan or lease, your lender or leasing company will usually require collision and comprehensive until the car is paid off or returned. Check your loan or lease terms before you change anything. If coverage drops below what the loan requires, the lender may add its own coverage to the loan, which often costs more.
When dropping full coverage may make sense
Once your car is paid off, compare what you pay for collision and comprehensive with what you'd get back after a loss. A common rule of thumb is to look closely when the yearly cost is a large share of the car's value.
Hypothetical example: your car is worth $4,000. Collision and comprehensive cost $700 a year with a $1,000 deductible. If the car were totaled, you'd get about $3,000 after the deductible. Paying $700 a year for that protection may not be worth it to you, especially if you could replace the car from savings.
What you lose by dropping it
- Repairs after a crash you cause
- Theft, weather, fire and animal damage
- Rental reimbursement, in many cases
- Protection if you couldn't afford to repair or replace the car yourself
Questions to ask before you switch
- Could I pay to repair or replace my car out of pocket?
- Is the car still financed or leased?
- Would comprehensive only, without collision, cost much less?
- Are my liability limits high enough to protect my savings and home equity?
How CapCenter can help
CapCenter's in-house insurance agency can quote auto alone or bundled with your home. An agent can show you the price difference between liability only and full coverage so you can decide.
