Full Coverage Auto Insurance
The term "full coverage auto insurance" usually refers to auto insurance that covers physical damage to a vehicle, including collision damage. This means that if your car is damaged because of contact with another object or automobile, full coverage insurance will pay for the repairs. Additionally, if your car is stolen, vandalized, or incurs other similar damage, your full coverage auto insurance will cover the cost of repairing or replacing the vehicle. Many insurance companies offer comprehensive coverage, which is likely their term for full coverage. Comprehensive coverage also pays for repairs if your car is damaged in a storm or by an inanimate object, such as a tree branch in the roadway.
Bodily injury coverage pays for injuries other people incur as a result of an accident involving your vehicle, and it is usually purchased separately from full coverage. Additionally, property damage liability covers the cost of repair if your vehicle causes damage to someone else's property. This is important to know because many people assume these additional coverages are included in full coverage auto insurance, but in most cases neither body injury coverage or property damage coverage are included in full coverage
Also important to note is that full coverage auto insurance pays for damage as a result of an accident, which means is does not pay for any minor or major mechanical repairs. In other words, if your brakes need to be replaced, the insurance company will not pay the costs. Regular auto maintenance is not related to insurance coverage.
How Does Full Coverage Insurance Work?
When acquiring full coverage insurance, you must purchase a policy. Policies can range from month-to-month arrangements to year-long coverage. Often, purchasers receive a discounted rate with longer policies. Once you select the length of your policy, you must choose a payment plan that fits into your budget. Year-long policies can usually be paid in one lump sum, bi-yearly, or monthly.
Ideally, you will never have to utilize the services provided by your auto insurance. However, if you sustain covered damage to your vehicle, your auto insurance should make a very difficult situation quite simple. If you are involved in an accident which requires you to report an insurance claim, always contact the local police department at the time of the accident. The officers will assess the situation and file an official police report. This report can be used to provide important information to your insurance provider, and it can expedite the processing of your claim.
After sustaining damage to your vehicle, contact your insurance agent to report a claim as soon as possible. The agent will likely ask many questions about the incident, so be prepared to spend some time giving thorough responses.
Once you have reported your claim, the processing is left to the insurance company. Your responsibility is then to arrange repairs of the vehicle. Always make sure that your repairs are completed by a business that is approved by your insurance provider. Many repair shops will work with your insurance company to arrange payment so that your out of pocket costs are minimized. With this arrangement, you will only be responsible for your deductible.
Each full coverage insurance policy has a designated deductible. The deductible is the amount of money you must contribute to your own repairs, and the deductible must be paid before the insurance company contributes any money. As your deductible increases, the purchase price of your auto insurance decreases. Essentially, the insurance company charges a higher premium for policies in which they hold the larger burden of repair costs. When the cost for your repairs is less than your deductible, you are responsible for all costs.
It is also important to remember that most claims on your insurance policy will cause your insurance rates to increase.
Who needs Full Coverage?
Full coverage auto insurance is essential for anyone who does not own their car outright. Lenders require car owners to carry full coverage to protect their investment in your automobile. If your car is damaged beyond repair, or totaled, you should have enough insurance to repay any loan for which the car is collateral.
People who do not have enough money in savings to replace a totaled car should also carry full coverage insurance. If you do not think you would be able to pay for minor auto damage on your own, you should also carry full coverage. In essence, full coverage insurance makes driving your auto a worry-free experience.