Full-Coverage Auto Insurance: What You Need To Know

When it comes to auto insurance, there are many different types of coverage. From state-minimum to full-coverage insurance and everything in between, it's important to understand the coverage type that best suits your needs. By having a better understanding of what constitutes full-coverage auto insurance (and when you might need it), you can feel more confident purchasing or renewing your policy.

You Might Be Required to Carry It

Start by understanding that you can be required to carry full-coverage auto insurance if you have any liens on your title. This is most often the case when you're still making payments on your car, whether it be on a lease or an auto loan. If this is the case, you'll want to check with your lender to find out exactly what your coverage requirements are. 

Even if you aren't making any payments on your car, you might still benefit from full-coverage insurance, especially if your car is relatively new or still retains a lot of its value.

It Consists of Comprehensive and Collision Coverage

A full-coverage auto insurance policy includes two important components that a state-minimum policy will not: comprehensive and collision coverage. Specifically, comprehensive coverage is designed to protect you from expenses related to vehicle damage that is not caused by an accident. This might include auto glass replacement after your windshield is cracked or shattered by hail. It can also include damage caused by vandalism or even theft, depending on your exact policy.

Collision coverage, on the other hand, covers damage to your vehicle in the event of an accident. This can be an accident with another motorist or even a collision with a stationary object, such as a guardrail or fire hydrant.

You Might Have Two Different Deductibles

In addition to comprehensive and collision coverage, a full-coverage policy will also have higher limits for liability protection. Keep in mind that with a full-coverage policy, you'll typically have two different deductibles: one for your liability coverage and one for your collision/comprehensive coverage. Depending on the nature of your claim, it is possible that you may have to pay both deductibles out-of-pocket before your coverage kicks in, so budget accordingly.

Now that you have a better understanding of what full-coverage auto insurance entails and when you might benefit from having it, you can select your own auto insurance coverage with a greater sense of confidence. If you have any questions about your policy, be sure to ask your agent!