Thursday, February 25, 2016

Understanding Auto Insurance: Full Coverage vs. Liability

One of the golden rules of driving is that you never drive without auto insurance. While all states require auto insurance, the type of coverage required can vary from state to state. Plus, that minimum coverage requirement isn't necessarily what you need. Knowing the difference between types of coverage is almost as important as knowing the rules of the road. Let's take a look at having 'full' coverage vs. liability coverage on your Lake of the Ozarks auto insurance policy.

Liability Coverage 

The majority of U.S. states have a minimum requirement of liability insurance. Liability insurance is a way for you to take responsibility for your own actions on the road. If you hit another vehicle or damage someone's property, you are under obligation to pay for the damages. In many cases, you probably don't have enough spare change laying around to cover it and that's where liability coverage on your auto insurance at the Lake of the Ozarks comes into play.

Your auto Liability insurance limit covers 3 different areas: bodily injury per person, bodily injury per accident and property damage. Your liability coverage will be listed in numbers such as: 50/100/25. You also may see a limit behind CSL that refers to Combined Single Limit which is one limit for the liability portion of the policy.  Regardless, these numbers represent the dollar amount in thousands that your insurance will cover for each of the categories. Unfortunately, many state laws don't require an adequate amount of liability coverage. When the liable party doesn't have enough liability insurance to cover the damage, the other party may have to cover it under their own policy under uninsured or underinsured motorists.  Keep in mind that their insurance carrier will likely subrogate back against the at fault driver, possibly going after other assets beyond the insurance.

Full Coverage 

The term "Full Coverage" is used by most people when they are referring to insuring the vehicles they own for physical damage.  This term is not the best description of the insurance product as it gives the feeling to insureds that it covers everything and that is definitely not the case as there are always exclusions on policies.

While it is not required in any state, it's a good idea to consider purchasing physical damage coverage for your vehicles. In addition to the liability coverage above, this coverage protects your vehicle through collision and comprehensive coverage and is typically subject to a deductible in the event of a claim. Should an accident occur, collision will pay for the damages to your vehicle. Comprehensive coverage will cover damage that occurs from weather, vandalism, broken glass, deer and auto theft. Depending on the year, make, model and value of your car this can increase the cost of your insurance dramatically.

While insuring your own vehicle for physical damage is not required by law, keep in mind that most lending institutions will require those financing a vehicle to purchase the coverage. This protects you as well as the lender.  Many people may think of it as an unneeded expense, but think about coming up with the money to get your car fixed on your own. Do you have enough cash lying around to get by if something were to happen to your vehicle?

What Coverage Do You Need? 

The choice of coverage is ultimately yours, but you'll want to make sure that it covers the most important aspects to you. Talk to your Lake of the Ozarks insurance company about your auto coverage. From personal auto insurance to insurance for your business fleet of vehicles, Insure the Lake has you covered. Give us a call at 573-348-2794 to review your coverage today!

Request a Free Quote Online! Contact Insure the Lake today for all your Lake of the Ozarks insurance needs! 

About the Author: Steve is a double back-flip insurance ninja. He was named Young Insurance Agent of the Year by the Missouri Association of Insurance Agents in 2010 and is a Certified Insurance Counselor. When he is not helping customers, he enjoys community service, Latin dancing with his beautiful wife and going on adventures with his two awesome sons.

Steve Naught, CIC
3736 Osage Beach Parkway
Osage Beach, MO 65065
Next to Golden Coral