Full Coverage Auto Insurance Explained

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The definition of full coverage auto insurance can vary from agency to agency and from state to state.  Some companies define full coverage insurance as the minimum required to legally drive in the state, while others refer to minimum coverage as liability insurance.  In most cases, however, full coverage insurance is defined a having physical damage coverage.  In this case, full coverage insurance will include both collision and comprehensive coverage.

Collision insurance will cover the costs if your vehicle is damaged by collision with another object.  Comprehensive insurance, on the other hand, covers the cost of your vehicle if it is vandalized or stolen.  It also covers the cost of replacing glass that is broken on your vehicle. Comprehensive insurance will also cover the costs of repairing your car if it is damaged by fire, flood, or animals.  Of course, you are still responsible for paying your deductible.  Therefore, the amount of money you receive will be lessened by the amount of your deductible.

If you have a lien on your vehicle, which means you still owe money to a lending institution before you own the vehicle outright, you will most likely be required to carry full coverage auto insurance.  In this way, the lienholder’s investment is protected.  You will also likely be required to carry full coverage insurance if you are leasing a vehicle.

Even if you don’t have a lien on your vehicle, it can still be a good idea to purchase full coverage insurance.  This is especially true if you have a newer vehicle, a vehicle that is in good condition, or a vehicle of particularly high value.  In this way, the expenses of replacing or repairing your vehicle will be covered if it becomes damaged from a natural disaster or because of an accident that is your fault.