What Does “Full Coverage” Cover?


There are a lot of banks which compels a car owner to obtain a full coverage insurance policy. This is because banks are trying to avoid their possible loss when one of their clients would be involved in a car accident, whether their client is the cause of the accident or the victim of such event. So, a lot of car owners buy a full coverage insurance policy. But what is a “full coverage” insurance policy? What exactly does it cover?

A lot of people believe that “full coverage” auto insurance covers for everything when it comes to car accidents. However “full coverage” is a misnomer in car insurance policies since it does not really cover for all damages or injuries one might get or cause during a vehicular accident.

Full coverage vehicle insurance usually describes the car insurance policy the state requires every car owner residing in it. Each state requires different car insurance policies, however, full coverage insurance policy commonly denotes a combination of two insurance policies—liability and comprehensive.

The liability insurance policy covers only minimal amount of injuries a policyholder inflicts on a person during a car accident. The minimum amount in this policy is determined by the state you live in. If you purchased this policy under the minimum amount then you are not really fully covered since you could get involved in an accident that could exceed the minimum amount. In that process, you would have to pay for the excess. Also, on such circumstance, there is a tendency that you could lose your assets especially when you only purchased the minimum amount required by the state.

In the comprehensive insurance policy your vehicle is covered from unexpected occasions except when you hit another car or another object. Combining this auto insurance policy with liability insurance policy could cover for most of the possible accidents you might get involved in. However, it still does not cover all.

The true full coverage car insurance is an insurance policy wherein you would be able to protect your assets when you are involved in an automobile accident and you injured someone or damaged another person’s properties.

A lot of people try to save money in their insurance policies by purchasing only the least amount of insurance policy. This, however, is not practical, since you might end up paying more. Full coverage insurance may be expensive but without it you might suffer a great financial loss.