Liability Only vs Full Coverage


Did you know that 1 out of 6 drivers in the state of Colorado are uninsured?  Did you also know that the majority of drivers on the road carry a liability only auto insurance?  Some of you might be petrified from this thought and some might be asking: “How does it impact me as a driver?”
It simply kills me to see some of the clients of our law firm suffer from financial stress and uncertainty on top of the injuries and pain they have to deal with after an auto accident.  Most the stress is the result of not understanding what coverage to choose and the reasons for needing it.  Most of us start to realize the importance of it only when we actually need to use that coverage.
Here is my attempt to put this complex system with its provisions and exclusions in the simplest form:
A Liability Only Policy:
This is an absolute minimum policy you could possibly purchase for your car insurance and of course it’s the cheapest.  In the state of Colorado a liability only policy has limits of 25/50/15.  This means that by purchasing this policy you are insuring the OTHER driver for up to $25,000.00 per person for their bodily injury expenses and pain and suffering and up to $50,000.00 per vehicle.  For example, if you hit somebody who was driving alone – that driver can receive up to $25,000.00, if you hit a vehicle that had two people in it – they can receive up to $50,000.00, if you hit a vehicle with 2 or more people in it – they can still receive only up to $50,000.00.  Additionally, you are covering them for up to $15,000.00 in property damage (their car repairs) in case the accident was your fault.  
This is all in case the accident is YOUR fault.  If it is THE OTHER DRIVER’S fault you just have to pray that you didn’t just get hit by 1 out of 6 uninsured drivers that are out there, or that if you got hit by another liability only insurance carrier, that the $25,000.00 will be enough to cover all of your damages and that your car repairs are worth less than $15,000.00.  Otherwise, you are out of luck.
“Full Coverage Auto Policy”:
Notice I put this term in quotation marks.  This is the most misleading term I hear from our clients and some of my dear friends.  What does Full Coverage mean?  To put it simply, full coverage can mean that you have purchased a property damage protection for your vehicle, such as Comprehensive coverage in addition to your essentially liability only coverage.  However, it could be a number of other coverages that you have purchased to protect yourself, and I am not even talking about the limits that you purchased, which matter.  Some limits are so small that you might as well not have that coverage all together.
Let me inform you that I am NOT an insurance salesperson and I do NOT benefit from the coverage you purchase or from the insurance company you chose to insure with.  However, after working in this industry for many years, here is what I think full coverage should mean:
(Please note that the limits listed are, in my opinion, absolute minimum limits you should have.  If you can afford more – buy more!)
  • Bodily Injury Liability – $100,000.00 for one person per accident, $300,000.00 for all persons per accident;
  • Property Damage Liability – $50,000.00 per accident;
  • Comprehensive – $50,000.00 depending on the value of your vehicle(s)
  • Medical Payments – $10,000.00 for one person per accident (although I would max this coverage as it’s very important); DO NOT REJECT THIS COVERAGE! Even if you have health insurance – there is a reason to have this coverage!
  • Uninsured/Underinsured Motorist – $100,000.00 for one person per accident, $300,000.00 for all persons per accident; THIS IS HOW YOU CAN PROTECT YOURSELF IN CASE YOU GET HIT BY AN UNINSURED DRIVER OR A DRIVER WITH LIABILITY ONLY INSURANCE.
  • Road Side Assistance
  • Rental – You must purchase rental coverage!  If you have kids and normally drive an SUV, do NOT opt into economy or standard vehicle – go for at least a small SUV. It’s only about $2 dollars more!
As you can see there is a lot more that goes into the concept of “Full Coverage”.  Look at your policy today and if you have any questions call me at 303-377-3474 and I will schedule a time for you to come in and have your policy reviewed for free!!  
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