When you’re shopping for car insurance, you’ll often hear the terms “Full Coverage” and “Liability Insurance.” What do these terms actually mean?

What is Liability Car Insurance?

Liability Insurance is the minimum coverage required by law in most states, including Minnesota. In most states, like Minnesota, you are required to carry at least Liability Car Insurance on your vehicle. Why is this, if you injure someone or damage someone else’s property, your car insurance liability will help pay for these damages. Here’s what it typically includes:

• Bodily Injury Liability (BI): Covers medical expenses, lost wages, and even legal fees if you’re responsible for injuries to another person in an accident.
• Property Damage Liability (PD): Covers the cost of damages you cause to another person’s property, like their car, fence, or building.

Liability insurance does NOT cover your own injuries or damage to your vehicle. It’s meant to protect other people and their property if you’re at fault in an accident. However, with Minnesota Insurance, there is Personal Injury Protection Coverage (PIP) which will cover your own injuries regardless of who may be at fault in an accident.

What is Full Coverage Car Insurance?

Full Coverage isn’t a specific type of insurance but rather a term that refers to a combination of different coverages that go beyond just liability. When people say “full coverage,” they usually mean that their policy includes Liability Coverage and coverage to repair or replace your own car.

• Collision Coverage: Pays for repairs to your car if it’s damaged in an accident, whether it’s a collision with another vehicle or an object like a tree or guardrail.
• Comprehensive Coverage: Covers damage to your vehicle caused by events other than collisions, such as theft, fire, vandalism, or natural disasters (think hail or fallen tree branches).

Which One Should You Choose?

The decision between Liability and Full Coverage depends on your situation:

• Liability Insurance may be a good option if:
  • You have an older car with a lower value.
  • You can afford to pay out-of-pocket for repairs to your own vehicle.
  • You’re looking to keep your insurance premiums as low as possible.
• Full Coverage might be the better choice if:
  • You have a newer or more valuable car that would be expensive to repair or replace.
  • You want to protect your investment from accidents, theft, or unexpected damage.
  • If you have a loan on your car, you will be required to carry the full coverage option in order to repair or replace your car if it is damaged.

Keep in Mind: State Requirements vs. Personal Needs

While states like Minnesota require drivers to carry a minimum amount of liability coverage, they don’t require full coverage. However, if you have a car loan or lease, your lender may require you to carry comprehensive and collision insurance until the vehicle is paid off.

Choosing the right coverage can be confusing, but it doesn’t have to be. At Ameriguard Insurance, we can help you determine what’s best for your needs and budget. Whether you’re looking for basic liability protection or comprehensive full coverage, we’ll make sure you have the right insurance for the road ahead.

Feel free to reach out to us for a personalized quote or more information on the coverage that fits you best!