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If your car is totaled and you only have liability insurance, you will have to pay to replace the vehicle yourself, or file a claim with the other driver’s insurance company. Liability coverage alone does not protect your car in any way, just injuries and damage you may cause to others.
You need to have collision, comprehensive, or new car replacement coverage if you want your insurance company to pay to replace a totaled car. However, if your vehicle is damaged or totaled in an accident that isn’t your fault, you should make a claim on the at-fault party’s property damage liability policy to get your car repaired or replaced.
Risks Liability Insurance Does Not Cover
- Damage to your vehicle from an accident.
- Damage to your vehicle from fire, hail, flooding, fallen trees/limbs, or animal strikes.
- Injuries you or your passengers incur.
- Theft or vandalism of your vehicle.
On the other hand, collision coverage would help if you cause a run-in with another vehicle or object that totals your car. Comprehensive coverage would apply to damage caused by a fire, storm, or animal encounter, as well as if your car is stolen. Finally, new car replacement coverage would let you recover the full value of a newly purchased vehicle that gets totaled.
People also ask
What is liability only insurance?
Liability-only insurance is car insurance that covers a third party's property damage or injuries in the event of an accident. The term “liability-only car insurance” is used to distinguish policies with basic coverage from those with collision insurance and comprehensive coverage.
Liability insurance is the only type of auto insurance that is mandatory in almost every state. It’s split into two main categories of coverage: bodily injury liability and property damage liability.
What Liability-only Insurance Covers
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Do I need collision insurance on an old car?
You need collision on an old car if you have an auto loan or lease. You should also keep collision insurance on an old car if you cannot afford to pay out of pocket to repair or replace the car after an accident.
A general rule of thumb is that you can think about dropping collision insurance if the premium exceeds 10% of your car’s value, so it’s possible that collision coverage might not be worth it...
read full answer by WalletHub, Financial CompanyWhat is third-party liability insurance?
Third-party liability insurance is insurance that pays when the policyholder injures another person or causes damage to another person’s property. In car insurance, third-party liability insurance is required in almost every state, and it only applies when the policyholder causes an accident. Third-party liability insurance does not pay for the policyholder’s own injuries or property damage.
The Parties in Third-Party Liability Insurance
In third-party liability insurance, the first party is the policyholder and...
read full answer by WalletHub, Financial CompanyDid we answer your question?
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