The term “full coverage car insurance” is commonly used when talking about both collision and comprehensive coverage. When auto insurance companies say collision coverage, they refer to the policy that will pay for the damages and expenses your car gets in case of an accident. Comprehensive coverage, on the other hand, pays for the damages caused by incidents other than road accidents. Incidents such as damage from fire, flood, extreme weather condition, as well as vandalism and theft, are covered by a comprehensive policy. To simplify, full coverage auto insurance gives you the best of both worlds.
A great number of auto insurance companies advertise some of their policies as “full coverage car insurance”, although some insurance experts argue that there is no such thing. Some experts say that the best these insurers can do is to provide physical damage coverage and policies required by local state law. No one really gets full coverage due to the fact that there are certain car owners who simply do not need extensive protection, according to some auto insurance experts.
When referring to both comprehensive and collision policies some auto insurance companies prefer the term “physical damage coverage” instead of using the term full coverage car insurance. “Full coverage” means that you get all policies available, and since no one does that, “physical damage coverage” is a more appropriate term. Furthermore, certain levels of policies are required, depending on whether a car is leased or not. Some state laws require leased cars to have more protection compared to financed cars.
Below are different types of policies available under full coverage car insurance:
1. Liability Coverage
Liability coverage takes care of bodily injury or property damage in an event where the policyholder is considered at fault.
2. Uninsured or Underinsured Motorist Coverage
Uninsured or Underinsured Motorist Coverage, or UM/UIM, takes care of damages if the negligent party (the driver who caused the accident) does not have auto insurance policy or does not have sufficient car insurance protection. There are two classifications of this type of coverage according to what they cover: bodily injury and property damage.
3. First Party Benefits Medical
First Party Benefits Medical pays for medical expenses needed by an insured driver as well as his passengers.
4. Optional Basic Economic Loss
This pays for lost salary if either the insured driver or his passengers are unable to go to work because of bodily injuries received from a car accident.
Being a responsible driver is not only about driving cautiously and keeping a good driving record. An important part of being a responsible driver is having sufficient knowledge of auto insurance and the types of policies available.