In my earlier blog posts, I explained the concepts of liability car insurance and comprehensive car insurance. If you do not know what these two terms mean, you can CLICK HERE for liability insurance and CLICK HERE for comprehensive car insurance.
Now, I will continue supposing that you know the concepts of these two car insurance policies.
As you know, liability insurance covers only the opposing car during a collision. Which means, your insurance does not pay for your car, it only pays for the car that you crash with.
On the other hand, comprehensive car insurance covers all the parties that are included in the collision. This means, your insurance pays both for your car, for you, for the car you crashed and the driver of that car.
In that sense, it is obvious that a comprehensive car insurance has a way wider coverage compared to liability insurance. Comprehensive insurance basically pays for almost everything after a collision.
If Money Doesn’t Matter for You;
In this case, without any doubt, a comprehensive insurance policy would win against a liability insurance policy. You will pay more for your insurance but case of a possible accident, you will not be paying anything neither for your car nor the car you crash with.
If Money Matters for You
If you can spare only a very limited amount of money, you will have to make a choice. We can now come up with two choices depending on two different situations based on the value of your vehicle.
If your car is not an expensive one, just forget about comprehensive insurance and get a liability insurance. Because, your car is not of high value already but there is a possibility that you crash with an expensive car. In such an incident, your liability insurance will pay for the third party car.
Buying a comprehensive insurance policy for your cheap car is not logical because your cumilative expenditure on your insurance may overvalue the price of your car. If you beleive that you can buy the same car with a little financial efford if your existing car gets burnt, stolen etc. then buy a liability insurance policy instead of a comprehensive one.
For instance, ask yourself this question; “would I have a financial breakdown in case I lose my car?” and if your answer is no, you do not need to have a comprehensive car insurance policy.
If your car is an expensive one, just do not take that much risk and get a comprehensive insurance which will cover your loss in case something happens to your car and it is completely gone. In such a case, the money you spent on insurance should not be seen as waste of money because you will be hedging a huge financial risk, i.e. you will protect yourself from any financial destruction.
To sum up, if your car is a cheap one, liability insurance will fit you perfectly, else, I strongly recommend you to buy a comprehensive car insurance policy.