LIABILITY COVERAGE VS. FULL COVERAGE FOR PROPERTY DAMAGE

So after 5 long years you finally finished paying off your car. You are therefore no longer obliged to continue having full coverage (collision insurance) for your vehicle. While this may be the case, it may still be worth it to keep your full coverage intact in the event that you sustain property damage. Before deciding to remove full coverage from your auto policy, there are a couple of things to consider.

LIABILITY COVERAGE VS FULL COVERAGE (COLLISION INSURANCE)

To start off, let’s be clear. Liability Coverage is something else entirely different than full coverage. Liability Insurance covers damages to people or property you may have hurt during an accident. It also covers your legal defense if you are sued after an accident. No-Fault benefits are also a provision under your liability insurance. No-Fault benefits will cover your medical expenses, loss wages and other necessary expenses associated with doctor visits if you are hurt in an accident.

Full Coverage on the other hand, pretty much just covers damages to your vehicle. Whereas Full coverage can be optional, every motorist in New York is required by law to have liability coverage.

WHEN CAN I TYPICALLY DRIVE WITHOUT FULL COVERAGE FOR PROPERTY DAMAGE

If you own your vehicle free and clear, you are usually not under any obligation to have full coverage. Lenders typically require full coverage when people are still financing the vehicle as it protects their interest. For example, If someone totals a car they’re financing, they would be less prone to continue making payments on the vehicle since they wouldn’t be able to drive it anyway. The same goes for leasing a vehicle.

HOW MUCH IS MY VEHICLE WORTH?

When deciding whether or not you should continue on with your full coverage, it is important to take a hard look at how much your car is worth. If your premium and deductible is higher than the value of your car it may be time to drop the coverage.

CAN I AFFORD TO REPAIR MY CAR ON MY OWN?

If you’re in a position where you need your car for work or to get to work – you may want to keep your coverage to offset the costs of repairing your car. This is especially so if you do not have sufficient savings set aside to cover the costs of repair.

WHAT HAPPENS IF I GET INTO AN ACCIDENT?

When you get into a car accident, even though another driver may be at fault your full coverage insurance could help. Your full coverage has a contractual responsibility to fix your vehicle and get you back on the road as soon as possible. Another driver’s insurance company does not have that same duty to you- regardless of if their insured was at fault. Your insurance company would be able to fix your car quickly and then subrogate the claim to the adverse vehicle’s insurance.