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What Is Full Coverage Car Insurance? Who Should Buy It?

Updated: Apr 24, 2022

Car insurance Policy

Car insurance Policy is a contract or agreement between you and the insurance company which protects your finance against a theft, an accident or any other natural causes or destruction of your insured car. The company agrees to pay a certain insured amount if any mishap happens to your car as outlined in the policy. The coverage includes Property damage, Liability or any medical bills.

What Is Full Coverage Car Insurance? Who Should Buy It?
What Is Full Coverage Car Insurance? Who Should Buy It?

Who are covered in a car insurance?

Car insurance covers you and other family members that are mentioned in your policy. May also cover the person who is not mentioned in your policy but drove under your consent. Personal insurance policy covers only when used for personal purposes but not when driven for commercial purposes. There may be an additional supplement added to the policy to cover ride sharing purposes such as Uber, Lyft etc.

Car insurance coverage
Car insurance coverage

What is Full Coverage Car insurance?

The term "Full coverage" literally doesn't mean that you insurance covers the total cost or provides coverage for the total damage done. Full coverage insurance refers that the insurance carries Liability Coverage, Collision Coverage and Comprehensive Coverage. There is no policy that provides 100% coverage in all the situations.

If you have a car loan or your car is leased , your mortgage lender or leasing agent may require you to have Full coverage car insurance as it helps to better protect the lender's finance.

cost of full coverage insurance can vary upon the State or location you live, Age of the driver, driver's history, type of car you own, insurance provider, deductible, coverage limit etc.

Types of Coverages
Types of Coverages

Who should buy Full Coverage Car Insurance?

Many people usually buy Liability only coverage which includes the bodily injury damage and property damage caused by you or others that come under your insurance policy. It does not provide any coverage or reimbursement to the injury caused to you or damage caused to your car. By getting Full coverage car insurance policy, it not only provides the coverage for your expenses but also provides coverage to the damage caused to other's injury or property damage as well.

Reasons for considering Full coverage

Here are some of the reasons or scenarios to be considered to buy Full coverage car insurance.

  • If you own an expensive car it may be advisable to go with the Full coverage, If your car is vandalized or damaged by a fallen tree the full coverage may be able to reimburse the whole amount of your car excluding the deductible.

  • You will have a better coverage if you are involved in a car accident that is your fault.

  • Having Full coverage helps you ease your mind and reduce stress regarding the car and it's coverage as some people won't be able to afford the repair and replacement of car damaged or stolen and it might disrupt the family's financial balance.

  • Some people prefer to pay extra premium on insurance rather than paying a huge amount in repairs and mishaps. The choice totally depends on how much risk can you tolerate and your financial situation.

  • For example, if a car is new and is worth around $25,000, and your car is totaled or stolen, you are responsible for the total cost of the car. In that case, you may consider paying a little extra on the premium to buy a full coverage insurance which includes collision and comprehensive coverage along with the liability coverage which covers the entire cost of the car minus the deductible.

These are only some types of coverages. There are also ride sharing coverage, road assistance coverage, Gap coverage etc. The coverages and its limits vary upon the state, type of insurance chosen,Insurance provider, deductibles etc. The cost of the Coverage varies upon the State, Age of the driver, Marital status, type of insurance chosen, insurance provider, Credit history, Driving history etc

The events and items covered by your insurance policy differs based on your policy and insurance provider. The conditions and limitations of the coverage vary upon your specific policy.

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