What is full coverage auto insurance? I am beginning to think that no one can really define that term in the insurance industry – – at least with any certainty. Every state has what they term as minimum coverage with regard to automobile insurance. This refers to the type and amount of insurance coverage that is required by law in that state to operate a vehicle. If you have a lien on your vehicle, the lender will require that you carry collision insurance, naming them as the loss payee so that they will receive their money if your car is wrecked. So what does full coverage car insurance really mean – – is it collision or is it state required minimums? Actually, full coverage auto insurance is a misleading term that refers to insurance coverage above and beyond what is required by your state. However, full coverage auto insurance is most commonly defined as an insurance policy that exceeds the state minimum requirements and includes comprehensive, collision, property damage and medical overages. What are the benefits of having a full coverage car insurance policy when you can pay less and only carry minimum coverage?
Many people often choose to decline collision and comprehensive coverage if they have an older vehicle or if they do not have a lien on their vehicle. They do this to save money on the insurance premium. However, there are several reasons why you should pay for collision and comprehensive insurance:
Protect your investment People reason that they are saving money by not carrying extra insurance. However, when their vehicle is involved in an accident that is their fault, without collision insurance, they will be responsible for the entire cost of repairs or replacing the vehicle.
It is impertinent to get collision insurance as vehicles are most often prone to accidents and breakdowns which is a big reason that certain individuals are careful with their savings as they know that an insurance would come in handy in the future so it is better to learn about how to get non owners sr22 insurance for reaping benefits.
Acts of God or other Environmental Damage Not all damage to vehicles is by an accident. If your vehicle is damaged from a falling tree, flood, fire, hail or other incident and you do not have comprehensive coverage you will be paying for the repairs or a new car.
Theft of Vandalism Without comprehensive coverage, if your care is stolen or vandalized you do not receive any money from the insurance company for repairs or a replacement vehicle.
Rental Vehicles Many collision and comprehensive policies cover rental cars. This will save you money when renting cars because you will not need to purchase additional insurance.
My state requires that drivers care uninsured motorist coverage in the event that we are involved in an accident involving an uninsured motorist. Underinsured motorist coverage is not required; however, I chose to carry this insurance because its advantages outweigh the small addition to my premium by:
Protecting me from drivers who carry minimum coverage I was in an auto accident several years ago and the driver at fault only had minimum coverage. His property damage amount did not even come close to paying for the repairs to my vehicle. My underinsured motorist coverage paid for the rest of the repairs with no deductible.
Medical payments If you do not have health insurance, underinsured coverage may benefit you by paying medical expenses if the person at fault does not have sufficient insurance to cover your costs.
GAP Insurance refers to additional insurance coverage you can choose to add to your basic policy that offers you additional property damage protection with regard to your loan or lease.
Payoff of lien difference If you have a loan on your vehicle or lease your vehicle, GAP insurance is beneficial because it will pay the difference between the actual value of your vehicle and the loan payoff. This keeps you from owing more money to your lien holder than you receive from an insurance company for property damage.
There are several optional riders that can be added to your required minimum car insurance policy that offer additional benefits for full coverage.
Rental Car Reimbursement Covers the fee for a rental car if your car is not drivable or is being repaired for a covered condition.
Towing I wish I had this coverage several times when I have been forced to tow my car for various reasons. It would have already paid for itself several times over.
Roadside Assistance Pays for someone to come and change a tire or assist you if your car brakes down. This is a relatively inexpensive additional to a car insurance policy but can be very useful especially if you have teenagers driving and want to make sure they are protected while on the road if the car breaks down.
Income Loss Protection The loss of income you experience when in an accident can be devastating. This coverage will help you recoup your lost income.
Funeral Benefits This coverage will cover the funeral expenses of the policyholder and passengers in the event of a fatal accident.
Full coverage automobile insurance policies can include all, or some, of these optional coverages plus many more that are not covered above. Each optional coverage has its own cost and conditions so you should thoroughly discuss each with your insurance agent before choosing the best options for your situation.