Liability insurance only pays for injuries and damages suffered by other people for whom you are responsible. By comparison, full-coverage policies cover both your liability and property damage to your own vehicle. What difference in liability costs are there in your state? Find out in the table below. Most states require drivers to have at least a minimum limit of car insurance coverage, often referred to as “minimum coverage.” However, if your car is leased or financed, your lender or landlord will likely require you to purchase full coverage.
Liability insurance only pays for other people's repair costs and medical bills after the accidents you cause. Don't delay processing any such correspondence you receive from the DMV, even if you are sure that your insurance is in effect. It's worth taking out full-coverage insurance if your car is worth more than the combined cost of a full-coverage policy and a deductible, or if you can't afford to replace your car without it. If you don't maintain liability insurance coverage for your car at all times, it can result in the suspension of your vehicle's license plate and driver's license, as well as other significant monetary penalties.
However, if your car isn't worth much and you can buy a replacement one or live without it, full coverage may not be worth it. Having coverage equal to the value of the assets you own and all the money you have, minus your debt, protects you financially in the event of a serious car accident. Collision coverage helps pay for damage to your vehicle if you hit another car or object, such as a fence, tree, or telephone pole. You may find that full coverage is the best option for you now, while in the future, you may be more likely to choose only civil liability.
A general rule of thumb is that you can consider canceling full-coverage insurance if the cost is more than 10% of the value of your car. If you're risk-averse or don't have the savings to easily pay for repairs to your car, full coverage may be the best option. Having full coverage insurance will provide an extensive financial safety net that will ease some of the burden of dealing with car problems. Contact your agent, broker, or insurance company to help you respond to these letters, or contact the DMV directly for information on how to handle such correspondence.
No-Fault is personal injury coverage and does not cover the repair of your car body or damage to the motor vehicle or other personal property of others.