Anyone looking to insure their car typically has several policy options, including full coverage or state-required minimum liability insurance.
Full coverage policies tend to be a bit pricier than basic ones because you’re also receiving collision and comprehensive coverage in addition to liability insurance. These two options cover crash and weather-related costs that minimum liability insurance doesn’t cover.
Basic policies meet your state’s required auto insurance limits — and that’s it. Suppose you crash your VW Passat, resulting in medical costs and property damages exceeding the limit noted in your policy. In that case, you’ll be responsible for paying any outstanding balance out of pocket. A full coverage policy, by contrast, takes care of everything minus your deductible.
Full coverage policies combine liability insurance with comprehensive and collision coverage. This protects you financially if a crash occurs or your Passat is damaged in a weather-related event.
If you cause a crash while driving, your policy’s liability coverage takes care of any medical costs or damage claims the other parties involved might file. It won’t cover any losses you experience, though.
Your policy’s collision coverage protects you in any kind of crash — whether with a car, another SUV, a commercial truck, or property like a fence or a building and regardless of fault.
Comprehensive coverage kicks in when damages happen that are not related to a crash — your Passat gets vandalized or a tree lands on it during a severe storm. In that case, comprehensive coverage pays for all repairs.
State Minimum Liability
Every state requires all drivers to have some form of liability insurance in case they cause a crash. While requirements vary by state, they generally list the minimum amounts a policy must provide to pay for medical costs and property damage.
In Indiana, for example, state law requires drivers to have basic policies that provide $25,000 in coverage to take care of medical or funeral costs for a single person involved in a crash you cause, with up to $50,000 to pay these costs if two or more people are involved. The state also mandates that these policies provide $25,000 to cover property damage.