Liability or Full Coverage?
The "to be" or "not to be" of Auto Insurance!
Liability or Full Coverage? These are the two most common phrases I hear from people when talking about the type of Auto Insurance they currently have. But was does it really mean? And how does each coverage work? Well, I'm here to give you the breakdown! Welcome to Auto Insurance 101! Over the course of the next few weeks I'll be breaking down each coverage and how each type works. So let's get rockin and rollin!
The first type of coverage and most common is known as Liability Insurance, aka the "Bare Bones" coverage. Liability coverage only offers protection in the event you're "At Fault" for an accident. Keyword "Liable" or "responsible by law". In fact, most states require you to carry this type of coverage. How it works is the "Insurance Company" will pay out for Injuries and/or damages to property (car, fence, house etc.) up to the policy limits.
Example of How it works:
"Okay.... You're driving around doing your normal daily routine with your child in the backseat talking your ear off and now they have dropped their sippy cup. The "water works" start! So, you ask "Do you know where you dropped it?" and they say "Right there". Your immediate response is "huh?!?!"..... So you start doing the one handed fishing trick in the back seat (keeping your eyes on the road, of course!) You can feel the cup! Victory is just around the corner! Then you turn your head for just a moment and BAM! you hit the car in front of you. You immediately check on your child and then step out of the car to check on the person you just hit. Everyone seems okay but they now have damage to the back end of their car and start complaining about neck pain. This is where your Liability Insurance would kick in........"
Most states have a minimum coverage limit you are required to carry. For example; in the State of Texas, you must carry a minimum of 30/60/25.
30 stands for up to $30,000 in injury protection for each person injured in the accident.
60 stands for up to $60,000 in injury protection TOTAL for one accident.
25 stands for up to $25,000 in property damage coverage (car, fence, house, etc) per claim.
Rates can vary depending on your driving record, age, gender, marital status, location, consumer reporting score and of course the vehicle itself. You can usually increase this coverage for very little. In fact, most people have no idea how cheap it can be to increase these limits. So double check your policy today!
The last little note I would like to leave you with is that there is NO coverage and I repeat, NO COVERAGE for injuries and/or damage's to you and your car under this coverage! Keep in mind that keyword "Liable". Don't let it confuse you with a different type of coverage.
Auto Insurance can be confusing, so double check your policy and if you have any questions or comments please let me know! Until next week! Be Alert, Be Safe, and Be a Happy Driver! :)