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Understanding Liability Law For Your Automobile
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by: AprilKerr
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Word Count: 440
If you want to own and drive a vehicle in the United States you will probably have to live up to a policy that required you to have an insurance policy covering the vehicle. Depending on whether you own the vehicle or not you will have to purchase either a full coverage or liability insurance policy. A full coverage policy will cover any damages done in an accident regardless of whose vehicle and property are damaged. The liability insurance policy only covers damages to property and vehicle that belong to anyone involved other than the policy holder.
A liability insurance policy is less expensive to purchase than a full coverage policy. Most states do require you to have an insurance policy in order to own and operate a vehicle. It is acceptable to have only a liability policy as long as you have full ownership of your vehicle.
If you do not own the vehicle yet and are making monthly payments to a financial institution or bank in order to purchase it, you will, in most cases, have to purchase a full coverage insurance policy on the vehicle. If the bank or financial institution owns the vehicle still, they want to you have full coverage so that the damages done to the vehicle will be covered by the policy.
They know that if you only had a liability policy and the vehicle was damaged to the point that it was not drivable, the chances are very good that you will not be able to make the payments if you are not able to drive the vehicle to your work. Even though it costs more on a monthly basis for a full coverage policy, you will be able to get the vehicle fixed after the accident and should have no problem continuing with the payments.
Another thing to consider if you own an older model vehicle that you hold the title to is what the value of your vehicle is. Insurance policies, both full coverage and liability, come with a deductible on the covered damages.
If your deductible is five hundred dollars and the vehicle is only worth five hundred dollars, you will not get anything from the insurance policy because your deductible and the cost to total out the vehicle negate each other.
If this is the case, the law still requires you to hold an insurance policy to drive so you might be better off paying a lower amount for the liability insurance policy so that you still meet the requirements of the law but are not paying more for the replacement of your own vehicle when it's value is not more than the deductible.
About the Author
April Kerr owns website JeriMoberly which has information on low price umbrella insurance and best price umbrella insurance companies.
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