Who Gets Full Coverage Auto Insurance?

Deciding whether or not to get full coverage auto insurance is something that a lot of people struggle with. Is it really necessary?

What Does It Cover?

Many people wonder, "What exactly does full coverage auto insurance cover?" The important thing to realize is that "full coverage" does not literally mean that you are covered for every possible circumstance. In fact, "full coverage" is not even an insurance term. This is a generalization that is used by people to illustrate that they have the three main components of car insurance. Each insurance company and policy is a little bit different. However, when most people talk about full coverage, they are referring to collision, comprehensive, and liability coverage. This means you are covered when you run into something or when someone hits you. The liability aspect covers others bills if you are at fault in an accident. If the other person has medical bills, your liability coverage will cover it.

What Is Not Covered?

Some things that are not automatically covered are rental cars, towing, and medical payments. This does not mean that your insurance policy can not cover these things, but it does not automatically cover them. You would have to customize your policy and add those features in if you want them to be covered.

Why Full Coverage?

Getting full coverage is up to the individual. There is no requirement that you be fully covered. You always have to have liability coverage. If you are going to be on the roads, you have to be liable for how you drive. If you have an "at fault accident", it would adversely affect another person if you did not have liability. However, it is your choice whether you want collision and comprehensive. If the balance on your auto loan is so much that you could not repay it if you were in an accident, then full coverage should be a consideration.

Who Gets Full Coverage?

The most common use of full coverage is for those people who buy new cars. When you buy a new car, you are taking a very big financial step. When you borrow $30,000 or $40,000 for a nice new car, you want to make sure that your investment is protected. Having a wreck in a new car without insurance is a quick way towards financial ruin. You would then be forced to make payments on a car that you can no longer drive. You will have to buy another car and you will now have two car payments and only one car. If this does not sound like an attractive option to you, you should definitely look at full coverage. If you always drive used cars that are not worth much, then full coverage is not necessary. If your car is paid off and you would not be adversely affected by a wreck, then you could skimp on your coverage and only get liability.

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