Full Coverage vs. Minimum Coverage: Which Auto Liability Coverage Is Right for You?

If you’re a driver in Texas, you’ve probably come across the terms “full coverage” and “minimum coverage” when exploring your auto insurance options. Understanding the difference between the two can help you make a smart decision based on your needs and circumstances.

Texas doesn’t require auto insurance specifically, but the state does require all drivers to show proof of financial responsibility. Most Texans choose to meet this requirement by purchasing auto liability insurance. At the very least, drivers who choose insurance must carry enough liability coverage to meet the state’s legal standards. This policy may pay for damage or injuries you cause to others but not for your own vehicle.

On the other hand, full coverage generally refers to a policy that includes liability insurance, collision and comprehensive coverage. While it might not be an official insurance term, full coverage is commonly used to describe broader protection covering other drivers and your own vehicle. Collision coverage helps pay for damage to your car from accidents, while comprehensive coverage helps after incidents such as theft, hail or vandalism.

If you’re financing or leasing your vehicle, your lender will usually require you to carry collision and comprehensive coverage. In some cases, they may also require gap insurance, which helps cover the difference between what your vehicle is worth and what you still owe.

Making the Best Decision for Your Situation

If you own your car outright and it’s older or not worth much, minimum coverage may be a practical choice. Just be aware that any repairs or losses to your own vehicle would be your responsibility if you’re in an accident. If you have a newer or more valuable vehicle, or if you want more financial protection, full coverage may be the better option. Contact Universal Tax & Multi Services to make sure you have the coverage you need.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.