In order to drive in any state in the country, people are required to purchase liability coverage. They must also have proof that they have purchased this insurance with them whenever they drive their vehicles. This shows that they are able to be responsible for any damages that they cause if they hit another vehicle. Liability coverage, in most states, is all they must purchase by law, but they may also want to purchase extra coverage for their own vehicles and this is what full coverage insurance is about.

Liability Coverage

The purpose of liability coverage is to pay the medical expenses and the property repair bills that result from an accident that the policyholder has caused. In states that allow drivers to sue each other when an accident has occurred, someone has to be declared the cause of the accident. The person who caused the accident is the one who will be responsible for paying all medical bills and property damage repair bills.

Bodily Injury Liability

After the at-fault driver has been determined, everyone who was hurt files a claim with that person's insurance company for payment of their medical bills. The state has set an amount of money for bodily injury liability that will be designated toward the medical costs of one person. They also would have required a set amount for more than one person who was hurt in the accident.

Property Damage Liability

During the car collision, property will often be damaged, and the at-fault drivers also need to be responsible for these repair bills. Similar to bodily injuries, the states have set an amount of money that will go toward everyone who files a claim for repairs done on their property that was damaged in the accident.

Full Coverage

Full coverage includes liability coverage, but it also includes various types of optional insurance. The exact definition of full coverage will be different for each insurance company but, generally, it refers to collision and comprehensive coverage. Liability coverage only applies toward third party bodily injuries and property damage. The policyholder will receive nothing from this coverage, but the at-fault driver will also have bodily injuries and property damage.

Collision Coverage

Collision coverage repairs the policyholder's vehicle no matter who is given the responsibility for having caused the accident. It will also pay to replace the vehicle if it needs to be totaled.

Comprehensive Coverage

Comprehensive coverage pays to repair or replace the vehicle if it sustains damage in any way other than a car crash. One example of another cause of damage is the damage that comes from vandalism.

Drivers aren't required to buy any more than the liability coverage their states have mandated that they purchase but if they want to have money for their own vehicles, they are free to purchase full coverage that will give them the amount they will need to pay for their own repairs.

Joann Carlisle is a writer who looks forward to sharing her knowledge and advice with readers. For more on auto insurance, Financial Highway offers readers ways to lower insurance rates.