Full coverage car insurance

Liability insurance is required in nearly every state.

Having a Liability-only insurance policy means if you cause an accident, you'll be protected financially against damages you cause to other vehicles and injuries you cause to other people.

Liability coverage does not cover your own personal expenses. For instance, it won't pay to repair your vehicle after an accident or other incident. For that, you'll need to buy the additional coverages that are considered part of a “full coverage” insurance policy, like Comprehensive and Collision.

Unlike Comprehensive and Collision coverages, Liability coverage doesn't typically require you to pay a deductible before coverage kicks in.

Comprehensive coverage is just one type of coverage included in a “full coverage” auto insurance plan.

Remember, “full coverage” isn't an actual type of coverage, but a general term used to describe a policy that combines Liability, Comprehensive, and Collision coverages.

When you purchase "full coverage" car insurance, Comprehensive (aka, coverage for non-collision incidents that damage your vehicle) is typically included in your policy.

Simply put, you don't usually want to pay more for insurance than what your vehicle is actually worth.

• Your premium. If your auto insurance premium equals 10% or more of your car's value, you might want to think about a Liability-only policy. For example, if the market value of your car is $5,000 and you're paying $500 or more per year for “full coverage” insurance, it may not be worth the cost.
• Your deductible. Is your car worth less than your deductible? For example, if you have a $1,000 Comprehensive or Collision deductible but your car is only worth $500, it may not make financial sense for you to have those coverages.
• Your savings. Even if your car is paid off, it may make sense to have “full coverage” if you don't have the financial resources to replace your vehicle after an accident - regardless of vehicle age or mileage.

Because “full coverage” auto insurance is a collection of coverages and not a single coverage, you can usually pick and choose which specific coverages are right for you (based on your individual situation and any state or lender requirements).

For example, let's say you've paid off your car and your lender no longer requires “full coverage” insurance. If you're confident you can afford to repair or replace your vehicle out-of-pocket in the event of a loss, you could consider removing Comprehensive and Collision coverage from your policy.