Typically, it is advisable to purchase full coverage car insurance. Liability insurance will not pay for damages to your own vehicle after an accident where you are at fault. It will also not cover damages due to theft, vandalism or acts of nature. If you finance or lease your vehicle, you may even be required to maintain a full coverage insurance policy.
If your vehicle is not especially valuable, you may want to skip full coverage and opt for liability-only coverage. Calculate the value of your car and compare this with the cost of full coverage premiums to help decide which option is best for your car and your budget.
As your vehicle ages, its value will depreciate. At a certain point, it may no longer be worth it to maintain a full coverage insurance policy. In general, 10 years is a good time to consider switching from full coverage to just liability. However, this depends on your particular vehicle.
A liability-only car insurance policy pays for the cost of property damage and medical expenses for other parties after an accident you are found at fault for. Your liability coverage will not reimburse you for damages to your own vehicle or medical bills for yourself and your passengers.
If someone else causes an accident involving your vehicle, your own liability insurance will not pay for damages. In this case, the at-fault driver’s liability policy should cover the cost of your property damages.
The difference in cost between liability vs. full coverage insurance depends on the state. In general, switching from liability-only to a full coverage policy could increase your annual premium between $400 and $800.
