Nobody likes to pay for insurance, but everybody is glad to have it when they are involved in an accident. As experienced lawyers, we receive many questions about insurance coverage. One of the most common is, “What is the difference between liability and full coverage?”

Below, one of our attorneys explains the differences and then considers what other insurance our clients might want to purchase to protect them in the event they are involved in a wreck. If you need help making an insurance claim for a car accident, contact us today.

Liability Insurance

Liability insurance applies when you cause damage to another person or their vehicle. The injured victim will make a claim on your insurance policy, and your insurer will pay compensation up to the policy limit.

Liability insurance does not cover you for your own injuries, regardless of who is at fault. Also, your insurer will not pay out benefits to a motorist unless you were at fault.

Georgia requires that someone registering a vehicle carry at least the following:

  • $25,000 in bodily injury liability insurance for an injury to one person
  • $50,000 in bodily injury liability insurance for injury to two or more people involved in an accident
  • $25,000 in property damage liability insurance

As you can see, there are two types of liability coverage—to cover bodily injuries and property damage.

Full Coverage

People use the term “full coverage” to refer to a combination of policies, specifically liability, collision, and comprehensive insurance. Not every driver needs all three, but some decide to purchase them.

Collision coverage is no-fault insurance that covers any damage to your vehicle sustained in a crash. This can involve collisions with other vehicles or with stationary objects, like a tree. Because collision coverage is no-fault, it doesn’t matter if the accident happened because you were negligent. You could have been speeding, run a red light, and T-boned another car. Collision coverage will pay to repair your vehicle up to the policy limit.

Comprehensive coverage also will pay to repair your car but only when it is damaged for non-collision reasons. Comprehensive kicks in to cover fire or water damage and even theft. It is also no-fault insurance, so it does not really matter why your vehicle was damaged.

As you can see, collision and comprehensive insurance do not pay out any benefits for personal injuries, not even your own. Car lenders often require that people with a car loan buy full coverage because it protects the value of the car. However, if you don’t have a loan then you might forgo collision and comprehensive if your car is not too valuable.

An Example of How Insurance Works

Imagine that Michael runs a red light and crashes into Mary. Both motorists suffer fractures and need to go to the hospital. Both drivers sustain damage to their cars that require repairs.

In this example, Mary can make a claim on Michael’s insurance for both bodily injury and damage to her vehicle. Because Michael is at fault for the crash, his insurer should pay Mary’s claims.

However, Michael cannot make a claim on Mary’s insurance for his own medical bills or lost wages. Since Mary as not at fault, her liability coverage will not kick in and he is basically out of luck. This is the result of being in a “fault” state like Georgia.

If Michael as full coverage, however, he could submit an insurance claim to have his car fixed. Remember, collision coverage is no-fault, so he can still make a claim even if he ran a red light and is at fault. Nevertheless, he still cannot get an insurer to cover his bodily injuries.

Additional Coverage

Full coverage provides good protection in the event of a crash. Still, it doesn’t cover everything. There are other coverage options available that our lawyers encourage you to consider:

  • Medical payments coverage. This is no-fault insurance that will pay for medical bills and other costs as a result of a collision.
  • Uninsured motorist coverage. If an at-fault driver lacks insurance, you can tap this to cover your injuries.
  • Underinsured motorist coverage. Your injuries might be so severe that you have losses that exceed the at-fault driver’s policy limits. You can use underinsured motorist coverage in these cases.

If Michael in the example above had medical payments coverage, then he could use it to cover his medical bills even though he was at fault. For this reason, medical payments coverage is often a good policy to have. It also can provide immediate benefits to help pay for a health insurance deductible. Check with an insurance agent for cost.

Should You Buy Additional Coverage?

If insurance is not required, should you buy it? This is an important question that every person must answer for themselves. On the one hand, there is the cost associated with picking up insurance that the state deems optional.

On the other, now might be the best time to buy uninsured and underinsured motorist protection. Because of the recession, many people are cancelling their insurance, and out of state drivers often do not carry liability insurance. Florida, for example, only requires that drivers have personal injury protection benefits, which are no fault. If a Florida driver slams into you, then you might need to lean on your uninsured motorist policy to obtain benefits.

Contact MG Law Today

Dealing with an insurer is difficult. Many try to deny completely meritorious claims, while others will drag their heels and refuse to pay out benefits in an orderly process. Often, you need an attorney to negotiate a favorable settlement that covers your losses and obtain prompt payment. In some situations, you might need to file a claim against the insurer for bad faith.

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