Which is Best for You: Liability Vs. Comprehensive Auto Coverage

May 15, 2018 by Susan Paige

Car insurance shopping is never fun, but it doesn’t have to be stressful. It can seem like an endless list of options to choose from, with every company touting their own superior plans. There are two types of coverage that deserve the most of your focus: liability and comprehensive.

The most affordable option is to get liability coverage for your car, but comprehensive does cover much more. Both have several pros and cons that need to be weighed. Let’s take a look at both to see what the best choice for you may be.

Liability Insurance

Liability coverage is aptly named, as it covers only the cost of damages that you are liable for. If you are at fault in an accident, liability is meant to cover whatever damage you caused. It is important to know exactly how much your plan will cover. If your policy is set to reimburse only $15,000, but the accident caused damages around $20,000, you are responsible for paying that last $5,000 out of pocket. You can choose your coverage when you pick your plan, so depending on your budget, it may be worth paying a little more monthly to guarantee coverage. One of the best things about liability insurance is that there is usually no deductible, so if you have enough coverage in your plan, you won’t have to dip into your own funds. The most critical thing to remember is that this does not cover damages to your own vehicle.   


Comprehensive coverage comes with significantly higher rates, simply because it does have many more benefits. Comprehensive will provide reimbursement for the damage to your car in addition to the damage you caused to other vehicles and property. Moreover, it will cover damages caused by other events than just accidents, such as if you hit a deer or a tree falls on your vehicle. Comprehensive insurance becomes most critical if your car is totaled or stolen, as you will be covered for the full cost of the car. There is usually a deductible, but when compared with prospect of paying for a new car, this may be a fraction of the cost.

How to Choose?

While liability insurance is more affordable, comprehensive comes with more benefits. So the biggest questions to consider are whether you need the added perks of a comprehensive policy and what makes the most financial sense.

If you have the money to cover the cost of a new vehicle in the worst case scenario that yours is totaled, you might not really need to pay more for comprehensive. If your car is much older and paid in full, it’s not entirely worth it to be paying more every month to protect a vehicle that likely won’t be on the road much longer. Also, many people don’t actually use their cars that frequently. If the risk of any major accidents or damage is significantly diminished, it might not make sense to be overly protective.

Maybe your car is brand new and you still owe a lot of money on your loan. In this case, comprehensive probably makes a lot of sense because you would have to pay off the full value of the car and be able to afford a replacement. That is a huge investment to make and most people do not have access to that kind of emergency fund.

Purchasing car insurance can be a good time to really re-evaluate your finances. It will help you determine what coverage is best for you and give you a better idea of your overall budget. Definitely take the time to examine the value of your assets and what you can afford now as well as in the event of an emergency.

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