In the advanced world where we live today, any information that we need is just a click away. With regards to insurance concerns, there are many available insurance companies that would gladly open their welcoming arms if you decide to take advantage of one of their policies. But not all information is easily understood especially with binding contracts such as car insurance policies. The terms are too technical and we need somebody to interpret these terms for us.
One of the most common issues among insurance companies is the full coverage auto indemnity. First, there is no such thing as full coverage. From the term alone, the common masses will perceived that no matter what happens everything will be taken care of. That is a wrong connotation actually. The term full coverage also has limits and don’t expect car insurance companies to fully shoulder expenses in case you will be in an accident.
Physical damage coverage will take care of the repair of the car in case it would be damaged by natural calamities such as floods, hurricane and others of the same kind. It is very important to take note that this is also termed as “other-than-collision coverage”. This means that if the car is wrecked because of collision, this coverage is irrelevant. But theft or even attempted thefts are covered. For example, the car windshields are damaged when somebody tried to steal it, then this coverage is applicable.
Collision coverage on the other hand will take care of the restoration of the car in case it is damaged due to collision. If the car is no longer repairable, the indemnity company will pay a certain amount that would replace the car. But this will have limits as well depending on the state’s requirements, deductibles and of course the amount of premium placed into it.
In most instances, if you are into a car loan, the car loan company will actually insist on carrying collision coverage auto insurance because this will be for their protection in case the car is damaged and you are not yet fully paid.
If you are driving a brand new car or a car that is still in a good running condition, it might be best to take collision coverage. This is to have a peace of mind that there will be a back up in case your expensive car is damaged due to collision. On the other hand, if you are driving a low maintenance type of car or the value has deteriorated, it is better to opt out on collision coverage. It might be impractical to spend on collision coverage if that is the case.