Car Insurance: Full Coverage vs. Liability 

When you are purchasing a car or taking out car insurance on a used vehicle, you are likely to be asked this question; do you want full coverage or liability insurance on that?  This post should clarify the difference between full coverage and liability on your car insurance.

First off, Full Coverage is not even a real insurance term.  It’s a made up term, that I’m not even sure where it came from.  However, this is the most commonly used term used for car insurance. When people or insurance agents use “full coverage”, they are referring to a combination of coverage that will repair or replace your vehicle should it become damaged.  Simple terms, full coverage enables you to repair or replace your damaged vehicle.

You are not required by law to carry full coverage insurance. If you have a loan on your vehicle, you will be required to carry full coverage insurance or the actual insurance company term, physical damage coverage.   

You are required by law in the state of Minnesota to carry Liability Insurance.  Liability Insurance or “Liability Only” is a package of coverage that covers your responsibility should you injure someone or damage someone else’s property as the result of a car accident.  Liability Insurance will also provide you with some medical coverage for you and your passengers.   When you here someone or your insurance agent refer to Liability Only, it means that you only have coverage should you cause damage to someone or something else.

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