What is Full Coverage Auto Insurance
In the vast and complex field of auto financing, full coverage auto insurance is one term that often pops up in discussions and suggestions. You might have heard friends talking about it, or your financial advisor to apply for it. It is very easy to get confused by the nitty-gritty’s of it. What exactly is full coverage auto insurance? Do I really need it?
Broadly speaking, full coverage auto insurance is nothing but an auto insurance policy which includes all possible covers you might need in insuring your car. This includes the following:
1. Comprehensive coverage: This the damage incurred on the car when it is not moving and not involved in a collision accident. For example, if your car has been stolen, burned down because the garage got on fire, or was destroyed in a natural disaster, the insurance company will pay for the damages.
2. Liability auto coverage: All 50 American states require every car owner to have to the state minimum liability coverage which covers the damage to the other person’s property, car, or healthy if you are at fault in an accident. In some policies, this also pays for the legal expenses in case a lawsuit is filed against you.
Some people consider “full coverage” to be a little deceptive. The reason behind this is that most insurance companies brand their insurance packages as “full cover” when they add other benefits to a standard auto insurance policy. These added bonuses vary from company to company and one has to get into the smallest details to get the best possible deal.
However, every full coverage auto insurance will protect your finances by insuring against huge medical bills, vehicle costs and damage covers. But then, it also costs much more than a regular auto insurance policy which narrows down the discussion to –
Do you really need full coverage auto insurance?
Well, this totally depends on your vehicle. If your car has a lot of miles on it and is quite old, you shouldn’t go for this. There is no point in paying super high premiums for a car that is not that valuable.
Conversely, most people who have bought a new car usually opt for full coverage auto insurance to protect their brand new baby against any possible loss or damage.
Another factor which few people tend to take into consideration is the area they live in. If you live in a bad neighbourhood where the crime rate is high, then chances of your car being stolen or vandalized are also high. In this case, it would be logical to consider a policy which gives you comprehensive coverage at least. On the other hand, if you live in a congested area which has more cars than people on the road with constant accidents happening, you are quite prone to being in one. A suitable collision coverage would be ideal in this case.
In the end, it would be advisable to check with multiple insurance companies and clarify in advance what they offer in a full coverage auto insurance policy.