People often use the phrase “full coverage” when talking about auto insurance. It could have been said by a friend, a family member or even your agent.
The technical definition of full coverage auto insurance is not true. Full coverage should not be promoted by insurance companies. It might be used by agents or brokers to help them distinguish physical damage coverage from state-required coverage. It is important to know what it means to people.
My insurance coach instilled into me that there is no full-coverage insurance. However, the term is still used by customers all over the world. Nevertheless, customers all over the world use it.
Question 1: What is full coverage auto insurance?
Full coverage refers to an auto policy that offers both liability coverage as well as physical damage coverage. This term is used to describe physical damage coverage. Comprehensive and collision coverage are the two types of coverage that provide physical damage coverage.
Collision covers the damage to your vehicle that results from an at-fault accident. Collision covers your vehicle’s broken headlight if you run a red signal and cause an accident. Collision insurance generally covers damages to your vehicle that are caused by collisions with other objects or roll-overs, if it is your fault.
Comprehensive insurance protects your vehicle from vandalism and theft. Comprehensive covers physical damage to your automobile caused by acts of God or other circumstances. It doesn’t matter if you use it. It’s not your fault if it happens. If, for example, you are driving down the road when a rock strikes your windshield, causing it to crack. The damage might be covered by your comprehensive. If you finance or lease your vehicle, most lien holders require coverage for physical damage.
Question#2 – Why isn’t it really ‘Full coverage’?
It’s not exactly ‘full coverage’ car insurance, as you can see. To use collision and comprehensive, you still need to pay your deductible. Sometimes it’s $50 and sometimes it’s $1000. It doesn’t matter what it is, full coverage auto insurance won’t cover it. It is necessary to make the check.
It is not possible to intentionally damage your vehicle. You cannot actually cover this kind of damage. If you are standing on the edge of a cliff and ready to transport your beloved car to its final resting place, you may consider backing up. Intentional damage is not covered by auto insurance.
Question #3: What is Full Coverage Auto Insurance?
In an ideal world, you wouldn’t need to use your car insurance. We don’t live in an ideal universe. If a tree falls on your car or you side swipe another car, you should inform your insurance company. These details will be your proof of insurance in the glove box. (You do have a copy in your vehicle, right?) ).
Your insurer should be contacted to describe the car’s physical damage. If another driver was not involved in an accident and you are not at fault, it may be possible to file a comprehensive claim. It’s called a collision case if you were at fault in the accident. At that point, your auto insurance company can assist you. Remember that claims are subjected to the policy guidelines.
Question #4: Do you really need full coverage?
If you own a new car, most car insurance companies recommend that you get collision and comprehensive coverage. If you are unable to pay cash for the car, you might consider full coverage. If the bank is financing the vehicle, they will require you to maintain comprehensive and collision coverage. If you damage your vehicle, banks want to compensate you.
It is important to know what your car insurance covers. Ask your agent if you have enough insurance. Most lenders require collision insurance. If you don’t have collision insurance, you can drop it to liability-only if it is necessary.
It might be time to cancel your collision and comprehensive coverage if you own a late model car. To save some premium dollars, you might consider dropping full coverage if your vehicle is worth less than a few thousand dollars.
