When do I need full coverage?

First, it’s important to understand that although you can certainly call up your car insurance provider and tell them you want a full coverage policy, full coverage insurance actually isn’t specific kind of auto insurance; rather, “full coverage insurance” is a phrase people use to describe an insurance policy that provides more than just your state’s minimum liability insurance requirements.

Second, be aware that you can tack on a variety of coverage types to your existing policy, but the two kinds of coverage that are most often associated with full coverage are:

  • Collision coverage, which covers your vehicle’s repair costs if you’re involved in a collision, and,
  • Comprehensive coverage, which covers your vehicle’s repair costs if it sustains damages from something other than a collision – most often vandalism, weather, and objects that aren’t other vehicles such as lamp posts and fences.

When to Buy Full Coverage Insurance

State’s mandate liability insurance requirements to make sure the party that isn’t at fault in a car accident receives compensation for bodily injuries and property damage incurred during the accident; collision and comprehensive coverage, on the other hand, is designed to protect the interests of the person (or entity) that owns the vehicle that becomes damaged.

Therefore, a full coverage policy is necessary when the owner of the vehicle wishes to thoroughly protect his or her investment.

Common instances in which full coverage is necessary (or just a smart idea) include when:

  • There’s a lien on the vehicle. Lienholders pretty much always require full coverage until the would-be owner pays off the auto loan and transfers the title.
  • The vehicle is leased. The reasoning here is the same as the reasoning for vehicles with liens; however, unless the driver outright buys the vehicle, odds are they’ll have to keep full coverage the entire time.
  • The vehicle is still fairly new and/or valuable. Usually, it costs more to repair or replace a new or valuable vehicle than it does an older vehicle. Without full coverage, the owner would have to pay those costs out of pocket.
  • The owner doesn’t have a significant savings account. Avoiding collision and comprehensive coverage when they’re not necessary might seem like a way to save money, but making monthly full coverage payments makes more sense if the vehicle becomes damaged or totaled and the owner doesn’t have money set aside to repair or replace it.
To learn more about purchasing full coverage, talk with your auto insurance provider.

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