#full coverage auto insurance
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What Does Full Coverage Auto Insurance Cover?
When individuals refer to full coverage they are usually describing a policy that covers the state s mandatory requirements as well as the additional protection of physical damage to the policyholder s vehicle. Every state legally requires different types of policies but most require liability which covers the bodily injury and/or property damage of another party if the insured is at fault. For instance, if a policyholder causes a collision, their carrier will pay for injuries and/or damages that they have caused up to their policy s limits.
Most commonly, when comprehensive and collision are added to a policy, people consider themselves fully covered. What comp and collision does is compensate the insured for any damages (minus the deductible) that their vehicle sustains due to the various perils listed on their policies. Most commonly; theft, vandalism, collision, flying objects, collision with animals, and hail. If an insured is driving and hits a deer that is crossing the road, their comprehensive protection will pay for the damages to their automobile minus the deductible that they have chosen. The most common deductibles chosen are $250, $500 and $1,000. So if a person has chosen a $500 deductible and the repair costs add up to $2,250, the insurer will pay $1,750 towards the repairs and the insured is responsible for paying the rest. One should know that when choosing a deductible amount it will affect the price of a premium; the higher the deductibles chosen the lower the premiums and vice versa.
One thing consumers should be aware of is that the term full coverage can be misleading. There can be many situations where the expenses resulting from an accident can exceed what is covered or may not be included at all. Often times people purchase these types of policies believing that they will having nothing to worry about following a collision. In the many states that follow the Financial Responsibility law, being fully covered often times means that they have protection to compensate for the injuries of others and damages to the insured s vehicles. What the policyholder may not be aware of is that the policy s limits may not be enough to pay for the entirety of the other party s medical expenses which will leave them responsible for any remaining costs.
In addition, if a person is involved in a collision where their vehicle is considered a total loss (repairs exceed the value of the automobile) they will only be compensated for the vehicle s fair market value minus the deductible that they have chosen; if a person is financing their automobile and is upside down on their loan (their loan balance is higher than the amount than they car s value) then they will be responsible for paying for the remainder of the loan balance. Many full coverage policies do not include medical compensation for the policyholder and damages caused by uninsured motorists. It is important to take the time to understand what types of policies are needed and what exactly it will cover in order to make an educated decision on what type of protection to purchase.
What is Full Coverage Car Insurance?
In California full coverage is often considered by many as a liability policy with at least the minimum required limits combined with comprehensive and collision. Although, other state s laws all have different requirements such as Uninsured Motorist. Therefore the term full coverage and what it includes can differ within each state. An example of this is would be a comparison of California s requirements versus Florida s. Florida makes it mandatory that motorists have Personal Injury Protection (PIP) and Property Damage Liability but does not require Bodily Injury Liability (may be required if involved in an accident or convicted of a certain offense). Therefore being fully covered in the Sunshine state may mean adding the protection for bodily injury to others and physical damage to one s vehicle.
Being fully covered can also be defined differently depending on who is asked. Although most will agree that having a vehicle protected for physical damage is necessary, some believe that there is more that is needed in order to have the proper protection. Many professionals in the industry as well as many states departments of insurance suggest that individuals purchase liability limits above the legal requirements. Most states require very little amounts of protection compared to the cost of medical care and vehicle repair or replacement which can be easily exceeded in the event of a traffic accident. Therefore there is no one concrete definition of full coverage , it is more of a matter of what can best satisfy an individual s particular insuring needs.