4 Things to Know About Full Coverage Auto Insurance
A friend, a family member, or actually your insurance agent may have said it before.
Technically speaking, full coverage auto insurance does not exist.
No insurance company should promote full coverage.
Brokers or agents might use it as a term to guide physical damage coverage to distinguish it from state-required coverage.
However, it is essential to understand what this indicates to people.
One of my insurance trainers coaches drilled into me, "There is no such thing as full-coverage insurance".
Nevertheless, customers everywhere use the term.
Therefore, my objective is to assist you realize what it is, what it's not, what it does, and whether you need it on your auto insurance policy.
Question #1: What is Full Coverage Auto Insurance? Full Coverage pertains to the auto policy whenever it offers both liability coverage and physical damage coverage.
Most people use this term to refer to physical damage coverage.
Physical damage coverage consists of collision and comprehensive coverage.
Collision handles the physical damage to your car in an at-fault incident.
When you run a red light and get into an accident, it covers the busted headlight on your vehicle.
Generally, collision insurance covers damage to your automobile caused by collision with another object or by roll-over when it's your fault.
Comprehensive insurance covers damage to your automobile from vandalism, theft or glass breakage.
Comprehensive handles physical damage to your vehicle through acts of God and other occurrences.
When you're utilizing it, the harm to your automobile is not your mistake.
- when it's not your fault.
For example, when you're traveling down the road and a stone strikes the windshield causing a crack.
Your comprehensive might include the damage.
Most lien holders require physical damage coverage if you are financing or leasing your vehicle.
Question#2: Why Isn't It Really 'Full Coverage'? As you can possibly tell, it's not precisely 'full coverage car insurance'.
You still have to pay your deductible to use comprehensive and collision.
Occasionally, it is $50, and sometimes its $1000.
Whatever it is, your 'full coverage auto insurance' won't include it.
You have to write the check for it.
You cannot deliberately damage your vehicle.
In reality, you cannot cover that kind of damage.
That sort of damage is simply not covered.
Therefore, in case you're standing at the edge of a cliff prepared to deliver send your old beater to its final destination resting location, you can may back up now.
There's no auto insurance for intentional damage.
Question #3: How Do You Use Full Coverage Auto Insurance? Ideally, you'll never have to use your car insurance.
But we don't live in an ideal world.
When a tree ever falls on your car, or you sideswipe another car, then you want to inform your insurance company.
These details are your evidence of insurance within the glove box (you do keep a copy in your car, right?).
Contact your insurer and describe the physical damage happened to your car.
When another driver was not involved in the incident, and you were not at fault, then it is possibly a comprehensive claim.
If you were at-fault in the event, it's a collision claim.
Your auto insurance company will assist you at that stage.
Keep in mind, claims are subject to policy guidelines.
Question #4: Do You Really Need Full Coverage? Car insurance companies generally suggest you have comprehensive and collision coverage if you have a new vehicle.
You may consider obtaining full coverage if you cannot manage to change the automobile with pay cash for your car.
Lastly, the bank will demands you to keep comprehensive and collision on the policy plan if they're funding the vehicle.
Banks like to be compensated if you wreck your car.
It's important to be aware of everything that your car insurance covers.
If you speak with an agent, ask him if your insurance is enough.
Most lenders require collision insurance.
If not, then drop it to liability-only but only if you are willing to take a loss on the car if you wreak it.
If you have a later model automobile, this it might be time to drop your comprehensive and collision.
If you can manage afford the danger of the vehicle worth a few thousand bucks loss, this might be okay to drop full coverage on your policy to conserve some premium dollars.