As you consider owning a car, there’s something that you can’t afford to overlook and that is fulfilling the relevant car insurance requirements. If you have ever shopped for an insurance cover for your car, you must have realized that there are lots of auto insurance covers, some of which are mandatory in some states while others are options. The most common ones include comprehensive, liability and collision liability. Perhaps you’d like to know to know more about comprehensive vs collision but here, we’ll focus on liability and comprehensive insurance covers. You’ll see the advantages of having each of them and what makes them different.
We’ll start with liability insurance
1. Liability insurance
Liability insurance won’t cover for damages on your vehicle in the event that you are involved in an accident. Instead, the coverage only caters for damages that other motorists and road users incur as a result of an accident caused by your fault.
For instance, if you over-speed and get involved in an accident as a result, lose control and hit another vehicle, you are supposed to pay for the damages the accident has caused on the other vehicle and people. If you have a liability insurance cover, it will pay for all those damages on your behalf.
Liability auto insurance is a two-in-one cover comprising bodily injury and property damage covers. Bodily injury pays for expenses resulting from injuries that other people incur from an accident caused by your fault. Particularly, it covers loss of income to victims who are unable to resume their normal work, their long-term and immediate medical expenses, funeral costs in case of death as well as your lawyer defense fees. On the other hand, property damage pays for damaged property, for instance, vehicle damage or replacement costs and damaged building/street lights repair expenses.
In most states, motorists are required to have a particular level of liability insurance coverage. This requirement ensures that the drivers who cause accidents that leave other people hurt and/or their properties damaged, compensate for the resulting damages, losses and injuries.
When you purchase a liability cover, you’ll find that its limits are broken down into three. The first limit indicates the maximum amount the insurance provider will pay for one person’s bodily injuries. The second shows the maximum payment for bodily injuries for everyone involved in the accident (except the insurance holder) while the third caters for the resulting property damages. In case damages exceed the relevant cover limit, you’ll have to pay the excess from your pocket.
2. Comprehensive insurance
Besides covering damages resulting from an accident related to your fault, comprehensive insurance caters for anything bad that happens to your vehicle, be it damages resulting from an adverse weather condition, theft, vandalism, collision with an animal or another vehicle. Unlike auto liability cover which only takes effect if a traffic accident is involved, comprehensive insurance takes care of damages from accidents as well as natural calamities like storms.
Normally, the coverage of a comprehensive cover is limited by your vehicle’s market value. If the value of covered damages is higher than the value of your car, the cover won’t cover the full amount but up to the amount that’s equivalent to the value of the vehicle.
A comprehensive auto insurance cover is usually more expensive than a liability cover, but as we’ve just seen, it covers more.
Hopefully, you are now more knowledgeable about liability and comprehensive insurance covers and how you can benefit from each. You need at least one of them for protection against some unforeseen future misfortunes.
Subscribe to our mailing list and get interesting stuff and updates to your email inbox.