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Buying A Full Coverage Car Insurance Policy


Before you decide to procure a full coverage car insurance policy, you should consider this question “Are you completely covered?” The term “full coverage” may sound appealing to a lot of car owners because they think their car will be completely covered in every situation. The truth is that every auto insurance coverage policy contains its own limitations, even ones marketed as “full coverage.” Primarily, a full coverage policy includes a liability insurance coverage, offered as a single package, in addition to comprehensive and collision policy for an insured car or vehicle.

In general, coverage limits of the liability part of the full coverage car insurance will be very clear and particular. Liability limits are usually specified in three parts namely:

  1. The highest amount an auto insurance provider will shoulder per person for all medical injuries caused by the policy holder.
  2. The highest amount an auto insurance provider will shoulder per accident, meaning payouts for multiple claims.
  3. The complete amount of any property damage per accident.

These liability limits can be changed by a policy holder based upon his or her needed coverage. It is important to choose a good auto insurance company which provides the best options on your preferred coverage since most providers only offer minimal coverage limitations. An auto insurance provider will be willing to shoulder only the agreed amount on the declarations page.

If you choose to have a low limit with just partial coverage, you can be vulnerable to a greater financial trouble. Should you cause damage which goes beyond the coverage limits indicated by an insurance company, you need to pay the amount that is not covered out of your own pocket. Therefore, it would be a smarter move to consider a higher coverage or full coverage car insurance policy.

Comprehensive and collision part of the full coverage car insurance policy is a bit complicated. In case of an accident, for example, an insurance company only pays the “cash value” of a car, not the full amount the car owner has spent to purchase it. There are certain rules and regulations that insurance providers need to abide to. They only pay property damage claims based on a car’s “blue book value,” and not its retail value. It would definitely serve to your advantage to be familiar with how auto insurance companies estimate your car’s value.  As soon as you buy a new vehicle and hit the streets for a couple of minutes, the car’s value automatically depreciates by thousands of dollars.