Comprehensive Auto Insurance or Liability-Only Auto Insurance: Which Coverage Is Best for You?

If your car is old and not worth much, you may want to drop Collision Coverage from your car insurance policy and stick to the state minimum

Comprehensive Auto Insurance or Liability-Only Auto Insurance: Which Coverage Is Best?
Image: NCCC
November 8, 2018

Want to save money on auto insurance? Depending upon your situation, you might save a lot of money on your auto insurance premium by dropping full coverage from your policy and carrying liability coverage only. But auto insurance shouldn't be changed on a whim. You have to do a little homework to figure out exactly which coverage you need.

Full Coverage Auto Insurance Versus Liability-Only Auto Insurance

Liability insurance protects other people and property if you are at fault for a collision. Full coverage, or comprehensive coverage, will also pay for damages to your vehicle should you be responsible for a collision or if fault for a collision is undetermined. Most finance companies require full coverage auto insurance as long as the vehicle is financed. Doing so protects the finance company should you be responsible for a total loss.

Use Your Car's Value To Determine if you need full coverage auto insurance

Generally, if you own a vehicle that is worth a lot of money, you should have full coverage auto insurance, also known as comprehensive or collision coverage. Full coverage auto insurance includes liability coverage. If your vehicle isn't worth much, you might consider liability coverage only. If you have an auto loan, you need insurance to keep your loan and car.

Must Maintain state minimum auto insurance coverage

You must maintain at least liability insurance in North Carolina or your license plate and ability to drive will be affected. Driving without auto insurance in North Carolina is a misdemeanor crime. North Carolina requires:

  • $30,000 bodily injury liability auto insurance, per person per accident
  • $60,000 of bodily injury liability auto insurance total per accident
  • $25,000 of property damage liability auto insurance, per accident

Dropping Your auto insurance Coverage Is Always a Risk

Whenever you increase your auto insurance deductible or remove coverage altogether, you are increasing your risk should you suffer damages. The more auto insurance coverage you have, the less your risk. The trade off is that you'll end up spending more money.

Whatever decision you make, understand the risks involved with your decision and always seek out your insurance agent if you have additional questions or need guidance.

Want to Save Money On Auto Insurance?

Are you looking to save money on your auto insurance but aren't ready to drop full coverage? We have some helpful information to save money on auto insurance.