How to Know the Differences Between Liability vs. Full-Coverage

Regarding commercial car insurance, there are a few different types of coverage choices. The two most common are liability and full coverage. But what’s the difference? And which one is right for you? Here’s a breakdown of everything you should know about liability vs. full coverage commercial auto insurance.

What Each One Covers

Deciding whether to purchase liability or full coverage insurance can be difficult. However, it is important to understand the differences between the two types of coverage before making a choice. Liability insurance covers damages resulting from an accident deemed the policyholder’s fault. Full coverage insurance, on the other hand, covers damages that occur because of an accident and damages that occur because of other covered events, such as weather damage or theft. In most cases, full coverage insurance will cost more than liability insurance. However, for some people, the peace of mind that comes with knowing that their property is fully protected may be worth the extra cost.

How Much Each One Cost

The cost of liability insurance is typically lower than that of full coverage insurance because it covers less. The amount you’ll pay for either type of insurance will depend on several factors, including the value of your vehicle, your driving history, and the state where you live. In general, drivers who own newer or more expensive vehicles and those with a history of accidents or traffic violations will pay more for both types of insurance. Liability insurance may be all you need if your company vehicle is older and not worth much. However, full coverage may be a good idea if the vehicle is new or worth a significant amount.

Law Requirements

Liability is usually required by law, while full coverage is not. Every state has different requirements, but most require drivers to carry at least some liability insurance. Full coverage is not required by law, but it may be required by your lender if your company has a car loan. If you’re not sure whether your state requires liability insurance or not, you can check with your local department of motor vehicles.

What’s Right for You

The answer depends on several factors. The best way to decide whether to purchase liability or full coverage insurance is to assess your needs and compare rates. Liability insurance may be all you need if you are an experienced driver with a safe driving record and own an older car. However, full coverage insurance may be a good idea if you are a less experienced driver or own a newer car. Another consideration is your driving record. Your insurance company will likely require full coverage if you have a history of accidents or traffic violations. Ultimately, the best way to choose between liability and full coverage is to consult your insurance agent and consider your individual needs.

Choosing liability or full coverage comes down to a question of balance: how much protection you want versus how much you’re willing to pay for it. Use this guide to help you make the decision that’s right for you.

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