Approximately 74% of drivers with auto insurance have full coverage auto insurance on their vehicles. If you own a car and want to drive, you’ll need to decide what type of policy to buy.
Do you need full coverage, or can you get by with a liability-only policy?
To answer this question, you might want to know more about full coverage. What is it? When is it a good idea? Do you need it?
As you begin analyzing your insurance options, you can use this information to decide which type is right for you. Here is a guide to help you learn some essential facts about full coverage.
The Main Types of Protection Full Coverage Auto Includes
What is considered full coverage insurance, you might wonder? Full coverage is a general term that describes a policy that includes several types of coverages. Let’s start with the primary two types:
Collision
The first thing a full coverage policy includes is collision protection. Collision protection is something that covers your vehicle. Imagine if you caused an accident and had damage to your car.
If you have collision coverage, your insurance company compensates you for the damages. You’ll pay a deductible first, but your insurance plan pays the remaining balance of the repair costs.
Collision covers your car, which is vital to know, even if you are responsible for the accident.
Comprehensive
Comprehensive coverage is another important type of protection you get with full coverage insurance. This type protects your car, too, but from damages that you encounter from incidents other than collisions.
For example, comprehensive pays the repair bills for your car if you hit a deer. It also pays for damages that result from vandalism or theft. Additionally, it pays for damages caused by storms.
So, if you’re asking, “what does full coverage auto insurance cover,” you’ll understand these two essential things. Full coverage protects your vehicle from almost any type of damage or event.
The Extra Coverage Types You Get
In this guide to auto insurance, you’ll also need to know the extra coverage types you have with a full coverage policy.
The first type is medical coverage. Your full coverage plan compensates you and your passengers for medical bills you might encounter after an accident. Your policy will have limits per passenger and for the total amount covered.
Next, your plan includes uninsured and underinsured motorist coverages.
Uninsured coverage is vital if an uninsured driver causes an accident that leaves you with damages. If this driver doesn’t have insurance to pay for the cost of the claim, your insurance plan covers it.
Underinsured is like this, but it’s designed for situations when an at-fault driver doesn’t have enough insurance. This driver might have some insurance coverage, but every plan has limits.
If the damages exceed the person’s coverage limits, your insurance plan kicks in to pay the rest of the costs.
While you shouldn’t have to compensate for uninsured and underinsured drivers, forcing them to have insurance is beyond your control.
In other words, you always take on the risk of encountering an uninsured driver, so it’s always good to have the protection you need if this ever occurs.
So, what does full coverage auto insurance cover? As you can see, it provides all the coverage types you could possibly need for your vehicles.
An Explanation of Liability Coverage
If you’re looking for a cheap full coverage auto insurance policy, you can check around with insurance agents. You could also consider buying a liability-only policy, as this costs less.
While a liability-only policy is not as comprehensive as full coverage auto insurance, it can be a good idea in certain situations. It’s also important to know that full coverage plans include liability coverage.
So, what is liability coverage? Liability coverage pays the damages to other cars that you damage from accidents.
If you cause a collision for any reason, you must pay the other driver’s damages. If you have liability coverage, your plan pays for the damages. If you don’t have liability coverage, you must pay them yourself.
Having liability coverage protects your finances, and prevents lawsuits. If you only have one type of insurance coverage on your car, you should have liability.
Factors to Consider When Deciding
Now that you understand the basic principles of full coverage insurance, you might wonder if you need it. Some people can get by with liability-only plans, while others benefit from full coverage.
Here are several factors to consider as you decide what type to buy:
Loan Status
You can’t have a liability-only policy if you have a car loan. Therefore, you must buy a full-coverage plan if you owe money on the vehicle. If you don’t owe money on it, you can choose which plan you want.
Car Value
If you don’t have a car loan, you should consider your car value. If it’s not worth much, liability insurance will probably work. If your car’s worth a lot, you might want more coverage.
Level of Protection You Want
You can also consider the level of protection you want. If someone sued you after an accident for not having insurance, would you lose a lot? If so, you might need more coverage.
Costs
Finally, you might want to request some full coverage auto insurance quotes to see how much it costs to have full coverage. You can also request a liability-only quote to see the difference.
Weigh Your Options Before Deciding
After reading about full coverage auto insurance, do you think you need it? If so, you can buy a plan from any company you choose. You can also ask for quotes from several insurance agents to compare prices.
Driving with full coverage insurance provides assurance, protection, and peace of mind. If you feel like you need it, don’t go without it.
If you enjoyed learning about full coverage insurance, you might like other insurance-related articles on our blog. Check it out today!
