What does full coverage mean on a car insurance policy?

Auto Insurance PolicyFull coverage on a car insurance policy typically includes comprehensive and collision insurance in addition to liability coverage. Full coverage is a misleading term because the insurance does not cover everything in full.

Typically, full coverage is used to refer to liability, collision, and comprehensive coverage, but every insurance company may have a different definition for it. Nor does it usually include additional policies such as medical insurance or uninsured motorist coverage. Even with liability, collision, and comprehensive, not everything is covered.

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Liability Insurance, Collision Insurance, & Comprehensive Insurance

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 basically is insurance for the other party’s car. You then 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 or property as well as for bodily injury or death. Your own medical needs or your own car’s damage is not covered by your liability insurance. In order to have insurance for you, you need collision car insurance, which is part of what is referred to as full coverage.

Collision car insurance will cover damage to your car whether your car was hit or if it hit someone else. Almost any impact is covered by collision, including a bicyclist running into your car. An exception to this is if your car collides with an animal, which is covered by comprehensive insurance. Comprehensive car insurance covers the majority of non-collision type incidents, such as your car getting struck by lightning or a window getting smashed by vandals.

Since liability only covers the other person’s car, collision and comprehensive are needed to cover damage caused to your own car. This is why buying liability, collision, and comprehensive is often termed full coverage.

Medical Insurance & Personal Injury Protection

Although medical insurance and personal injury protection are not usually considered part of full coverage, some would say that this is an essential part of car insurance and is truly needed in order to have full protection. Liability covers bodily injury for the people in the other car, but it does not provide you with any medical insurance if you should need it.

If you are at fault for an accident and you suffer from injury as a result of that accident, then you may need medical insurance to cover your medical bills. If you have health insurance and emergency room treatment then you may not need additional medical coverage, but it is worth considering especially if you don’t have any other means of paying medical bills.

Personal Injury Protection is known as PIP and is required in no fault states. No fault states mandate everyone to carry PIP so that everyone is responsible for their own medical bills. This was done to reduce the amount of frivolous law suits that sometimes occur in states where fault is determined and blame is assessed. PIP assures that everyone is responsible for his own medical insurance as related to car accidents if it is ever needed.

Uninsured Motorist & Underinsured Motorist Coverage

Although liability insurance is required in every state, not everyone abides by the law. This means that some people drive without car insurance, leaving you at financial risk if they strike you. Uninsured motorist coverage gives you insurance for times when you may be in an accident with someone who is not currently insured.

Underinsured motorist coverage is similar to uninsured motorist coverage with the exception that the underinsured motorist has some insurance. Underinsured motorist coverage refers to a person who has car insurance, but only the bare minimum required by law. While this insurance offers some liability coverage it is not usually substantial enough to cover all losses that can occur in an accident. If you are hit by someone who has basic minimum liability and your car is totaled, you may still be out of pocket on the difference. Underinsured motorist coverage may help you cover the difference.

There are so many optional insurance policies that can be purchased to give you full coverage, but even so not everything will be covered. In order to know what is included and what is excluded on your policy, review it in fine detail and ask your agent if you have any uncertainties.

If you have full coverage on your car insurance policy then you probably have liability, collision, and comprehensive. To purchase full coverage you can request no obligation rates now from the convenience of your computer by using the simple free quote tool.

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