What Does Full Coverage Auto Insurance Means?
When I ask my prospects about what coverage do they currently have on their auto policy, the answer that I hear almost every time is, "I have full coverage." I have no idea where they hear this term in the first place. The fact is there is no such thing as "Full Coverage Auto Insurance". It DOESN'T EXIST!!! It is a term often used by insurance companies or agents to refer a combination of bodily injury/property damage & Comprehensive/Collision coverage. This coverage does not mean that you are fully covered. You must make sure to understand how this coverage protect you so it will safe you tons of money in the future.
Most car insurance companies consider liability, collision, and comprehensive to be "full coverage" for your car. However, this does not mean that every car part — internal and external — is covered in every claim. Even if you have full coverage, your car is not covered for mechanical failure or fraudulent claims.
Your policy may also have exclusions, such as if your installed car stereo is covered in a break-in, but your laptop may not be.
Liability insurance is insurance for the other party’s car. You only need to submit a liability insurance claim if you are at fault for causing damage to another person’s physical being or personal property. Liability covers damage to a victim’s car/property, and it covers bodily injury or death.
Liability insurance does not cover your medical needs or your own car’s damage. To have coverage for you, you need collision car insurance, which is part of what is referred to as full coverage.
Collision coverage will help pay for repairs to your car (as well as replacement costs, in the event your car is totaled) after:
Crashing into another car.
Crashing into an object.
NOTE: If your car is damaged in a hit-and-run incident, you will generally be covered through collision coverage. However, this may not be the case in no-fault states or other states.
Comprehensive coverage will help pay for repairs to your car or replacement of your car after it's been damaged by events that aren't accident-related.
Typically, with comprehensive coverage you'll be covered for damage from the following:
Falling (missile) objects,
Hitting or being hit by an animal including deer, cows, bears, moose and birds,
Note that not all policies are the same. Before purchasing comprehensive coverage, make sure you talk to your agent so you know what your comprehensive policy will cover.
Since liability only covers the other person’s car, collision and comprehensive are needed to cover damage caused to your car. Thus, buying liability, collision, and comprehensive is often called "FULL COVERAGE"
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