Full coverage or liability only: how to decide
There is no such thing as a full coverage policy. What the phrase actually means, and when dropping collision makes sense.
Full coverage is not a product. No policy is labeled that. It is shorthand for liability plus collision plus comprehensive, and knowing what each piece does is what lets you decide sensibly.
The three pieces
- Liability: damage and injuries you cause to other people. Required in Texas
- Collision: repairs your car after a crash, no matter who was at fault
- Comprehensive: everything that is not a collision, meaning hail, theft, fire, flood, vandalism, a cracked windshield, hitting a deer
When you have no choice
If your car is financed or leased, the lender requires collision and comprehensive and will list itself on the policy. Let it lapse and the lender buys force-placed coverage, charges you several times what it should cost, and protects only itself. Here is how lender requirements work.
When dropping collision makes sense
Once the car is paid off, run this calculation. Take the car's actual cash value, subtract your deductible, and compare the result to what collision and comprehensive cost per year.
A 2009 sedan worth 3,000 dollars with a 1,000 dollar deductible can pay out at most 2,000. If collision and comprehensive cost 600 dollars a year, you are paying almost a third of the maximum payout every year. At that point dropping collision is defensible.
Do not drop comprehensive in South Texas
Comprehensive is the cheaper of the two, and it is what covers hail. Hail claims here are common enough that comprehensive earns its price on older vehicles that collision no longer makes sense for. It also covers theft and glass, and many policies handle windshield repair with a small or waived deductible.
What full coverage still does not include
- Gap between what you owe and what the car is worth, which needs gap coverage
- A rental car while yours is in the shop, unless you added rental reimbursement
- Your own injuries beyond what PIP or medical payments coverage provides
- Personal belongings stolen from the car, which usually falls to homeowners or renters insurance
We will run both numbers
Tell us the year and mileage and we will show you the payoff math on your actual car. Call (956) 687-3334. Se habla español.
Common follow-up questions
Does full coverage mean everything is covered?
No. It means liability, collision and comprehensive. Rental, gap and roadside are separate options.
Can I keep comprehensive and drop collision?
Yes, and on an older paid-off car that combination is often the right answer here because of hail.
Will my rate drop a lot if I go liability only?
It depends on the vehicle. On an older car the savings are real but smaller than people expect, because liability is a large share of the premium.
Want this looked at properly?
We are an independent agency in McAllen serving Hidalgo, Cameron and Starr counties. No cost to talk it through.
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