If your vehicle is old and not worth much, you may want liability coverage along

Crashed Car / Do You Need Full Coverage Auto Insurance or Liability Coverage Only?
Image: Pixabay
Updated: February 20, 2017

Readers have been looking for ways to cut back on costs and have been looking to make those cuts in auto insurance. The main issue then becomes whether to have full coverage or only liability coverage on the vehicle.

How Much Is the Car Worth?

Generally speaking, if you own a vehicle that is still worth a lot of money, you almost always want full coverage, also known as comprehensive coverage. Full coverage includes both liability coverage and collision coverage.

If your vehicle isn't worth much at all, you might consider liability coverage only. Of course, where you draw that fine line for your vehicle's value is entirely up to you.

Remember, however, that you must maintain at least liability insurance in North Carolina. Failure to do so will result in a revocation of your license plate and an inability to drive. Driving without insurance in North Carolina is also a criminal offense and a misdemeanor crime, not a simple traffic infraction. The translation: you can go to jail!

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 cannot be determined. Most finance companies in North Carolina require full coverage for as long as the vehicle is financed. Doing so protects the value of your vehicle should you be responsible for a total loss.

Base Your Decision on Your Needs

Take a look at the value of your vehicle and make the decision based upon your needs. If you drive a lot, have an older car, and are very safe, you may consider liability only. If you have a vehicle that's still worth thousands, you may consider keeping full coverage.

Of course, it's a gamble and a risk. Essentially, the more insurance you have, the less risk you have. The trade off is that more insurance also means spending more money.

It's a difficult decision. There's always a possibility that you drop full coverage and then run off the road a week later. There's also the same possibility that you load yourself down with full coverage protection and never have use for it.

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