Full Coverage vs. Comprehensive Insurance

The world of car insurance is littered with terms and policies that can make such a vital decision appear confusing or unclear. With different types of coverage offering different benefits to the driver, the process of choosing the right policy is very personal, but knowing insurance terminology makes the decision much clearer.

Definition of Full Coverage

There are three main types of car insurance: liability, collision and comprehensive. Depending on your current financial situation and your state's minimum car insurance requirements, your policy will normally include a combination of these three-referred to as full coverage. Although "full coverage" isn't necessarily a technical term, it generally refers to a policy that complies with your state's required liability limits that includes collision and comprehensive insurance. This means that based on the state minimum, your insurance company will cover the cost of repairing damages to another person's vehicle and property as well as their hospital bills for injuries sustained in a crash that is your fault. Where liability covers damage to others if you are responsible, collision insurance only covers damages to your own car in an accident. These incidents are the most common and can involve anything from backing up into a mailbox to a head-on collision with a tree, a telephone pole, or even another driver. With full coverage, you will be able to file a claim in each of these cases.

Choosing the Right Coverage

In order to cut costs, many drivers will settle for just liability insurance; however, this doesn't protect the driver at all-it only covers damages to others involved. Therefore, if a driver opts out of full coverage, it is valuable to at least be protected by either comprehensive or collision insurance as well. If a policyholder's vehicle is being financed, it is not possible to have collision insurance without comprehensive. For owners who are not financing their vehicle, it can sometimes be more affordable to repair or replace an older car than file a claim. In this case, collision and liability insurances are adequate.

Where incidents involving other drivers and accidents that are the driver's fault fall under collision and comprehensive insurance usually refers to non-collision events. Comprehensive insurance is considered physical damage coverage and protects a vehicle from losses that are generally not the driver's fault. With comprehensive cover, damages in theft, natural disaster, and even some animal collisions are protected. Auto-insurers in some states may not cover hail or tree fall damage unless explicitly added to the policy. Auto insurance policies do not cover destruction from a storm or hurricane that is declared a national disaster, or if damages incur as a direct result of a national emergency; instead, these fall under federal insurance.

When it comes to deciding which policy is most suitable, developing an awareness of the limitations in each type of insurance as well as their benefits is invaluable when comparing car insurance online. An uneducated driver risks financial devastation in the advent of an unprotected collision or incident, and the right policy makes all the difference.