Full coverage in regard to auto insurance simply refers to the highest amount of coverage you can have on a single vehicle. There is no set policy that is considered full coverage since every vehicle is different. However, most full coverage policies include the same types of coverage.
A full coverage car insurance policy may include:
- Comprehensive Coverage: Comprehensive coverage provides compensation for damages to the vehicle caused by fire, wind, hail, lightning, smoke, theft, vandalism and other incidents not involving a collision.
- Collision Coverage: Collision coverage provides compensation for damages to the vehicle caused by a collision with another vehicle or object.
- Liability: Liability insurance covers bodily injury and property liability the driver may cause while operating the insured vehicle. This is the insurance that is primarily required by state laws, though limit requirements may vary state to state.
- Medical Payments Coverage: Medical payments coverage, available as personal injury protection in some states, provides compensation for injuries the driver and their passengers may sustain after an accident. This covers medical expenses no matter who is declared at fault for the accident.
- Uninsured/Underinsured Motorist: Uninsured and underinsured motorist coverage compensates for damages incurred in an accident involving another driver who is not carrying insurance.
- Roadside Assistance: Roadside assistance can help with expenses related to trip interruptions such as losing a tire, running out of gas or needing to be towed.
The limits of these coverages may differ vehicle to vehicle regardless of requirements, which is why there are different versions of full coverage auto insurance.
When is Full Coverage Auto Insurance Required?
While full coverage auto insurance isn’t generally required by state or federal law, it may be required by dealerships. So long as you have a loan on your vehicle, the dealership may require you to carry full coverage auto insurance. This ensures that you and the dealership are covered for the value of the vehicle in case of an accident.
In most cases, you can drop or lower full coverage auto insurance once the vehicle is paid off. This isn’t generally recommended, however. The only time you may be recommended to drop or lower your full coverage auto insurance is when the value of your vehicle exceeds that of the cost of insuring it. In other words, if it would cost less to replace your vehicle than to file a claim and repair it, you may want to have less auto insurance coverage.
Also Read: Is Filing a Car Insurance Claim after an Accident Mandatory?
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