Auto Insurance Full Coverage
"Full coverage" is a term you will encounter frequently on insurance sites and in speaking with agents. But because the term is rarely defined adequately, few shoppers actually know what such a policy entails. Indeed, the industry has several different views on exactly what full coverage auto insurance should and should not include. Speaking generally, auto insurance full coverage policies offer coverage above and beyond the standard liability protection provided by all policies. Most commonly, that means the policy offers comprehensive auto insurance as well as collision. As you will read in what follows, however, full coverage policies can become infinitely more complex, which is why you as a consumer should inform yourself before you buy.
Full Coverage Policies: Protecting Your Vehicle
The quintessential difference between full coverage auto insurance and bare-bones liability policies is that full coverage will pay for damage to the insured's vehicle as well as that done to the vehicles of others in an accident for which the insured is at fault. Without full coverage, the policy would pay for the injuries and property damage caused to others, but the repairs to the policyholder's vehicle would be his/her own financial responsibility. The coverage that pays for such repairs is known as collision.
Even when a loss does not involve an actual collision, full coverage policies may still pay for the damage if the policy also includes comprehensive auto coverage. Comprehensive essentially takes care of most of the damage a vehicle can sustain outside of a collision with another vehicle or object. Covered losses might include theft, vandalism, fire, and weather-related issues like hail and wind. Typically, only a full coverage auto policy would offer both comprehensive auto insurance coverage and collision protection.
Pros and Cons of Full Coverage Car Insurance
The most salient advantage of carrying an auto insurance full coverage policy is the peace of mind of virtually all-inclusive protection. In the event of an accident, your policy will insulate your finances against the costs of having to repair or replace your vehicle and/or the vehicles of others. You also usually receive useful and valuable coverages such as uninsured motorist coverage and rental reimbursement, which will pay for a rental car if your vehicle becomes disabled.
On the other hand, the disparity in premiums between a basic liability-only policy and a full coverage auto insurance policy is substantial. While cheap full coverage auto insurance is by no means impossible to obtain, full coverage policies always cost significantly more to carry than their bare-bones liability counterparts. Of course, the extra premiums you pay may pay for themselves in the long run if you suffer a loss for which you would have otherwise been entirely financially responsible.