August 23, 2014

Understanding Full Coverage Auto Insurance

Full coverage auto insurance is an insurance policy containing a combination of liability, comprehensive and collision coverage along with various other forms of coverage. The term itself can be a bit misleading since it does not necessarily give the driver full protection in the event of an accident. There is an industry standard when it comes to full coverage insurance plans. Insurance providers must include liability, collision and comprehensive coverage in their policies in order for them to be considered full coverage. However, from there the insurers are free to add any other services that they see fit so, in the end, a full coverage car insurance policy can differ significantly from one insurer to the next.

The particulars of a full coverage policy can often be difficult to comprehend, especially for new and inexperienced motorists. What is important is for a driver to understand what each service within a policy is for and whether it is right for them or not. Selecting the right services can be what separates an expensive policy from one that is reasonably priced. It is normal for motorists to want to be as protected as possible, but adding extra features will also increase their monthly premiums, so this is something that they must consider. A balance between the two is necessary in order to find a fair price for your needs.

Liability Coverage

Liability coverage is something that not only full coverage insurance policies must have, but all policies for that matter. It is the minimum amount of protection required in every US state. It is used to cover expenses done to a third party when a driver causes an accident. These expenses include medical bills for injuries, as well as repairs and replacements for property damage. In certain situations, legal expenses are also included in this coverage should the accident lead to a lawsuit.

Collision Coverage

Damage done to the at-fault driver’s property is not included in liability coverage. This is handled by collision coverage. Obviously, the most common expenses will be repairs and replacements necessary on the motorist’s vehicle. There will be certain limits to the amount of money that can be obtained for repairs this way. Each policy comes with a predetermined amount of coverage and, needless to say, a higher limit results in a higher premium. This limit extends not only to collision coverage, but to all services included in the car insurance policy. At the same time, the repairs done to the automobile must also not exceed the market value of the vehicle since, in those cases, the car is replaced altogether (if the policy limit will allow it, of course).

Comprehensive Coverage

Comprehensive coverage is the last form of coverage included in all full coverage policies and it involves repairs for damage sustained to a vehicle when it is stationary or otherwise not involved in a collision. Most common examples include violent acts of nature such as tornadoes and torrential rains, as well as random acts such as falling tree branches. Comprehensive coverage also takes care of costs in the eventuality of theft or vandalism.

Some states require their policies to include additional services in order to be considered full coverage. In other cases, the insurers simply choose to add more features in order to make their policies more appealing. While certain drivers will enjoy the extra services, others will want to keep their policies minimal in order to save money. Other possible features include towing services, gap insurance, free rental services, lease payoff coverage, roadside assistance coverage and personal injury protection.

You can access an entertaining video series that illustrates how the different types of coverage included in a full coverage insurance policy work here. The videos in the series are an excellent way to introduce new and young drivers to the basics of auto insurance.


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