Is Full-Coverage Car Insurance Necessary?

Is Full-Coverage Car Insurance Necessary?

When you compare auto insurance quotes, one of the things that you will be comparing is the cost of different types of coverages. Auto insurance quotes contains the price for individual coverage, the limits of those coverages and the cost of carrying a low deductible versus a high deductible.

Your auto insurance comparison should be for the same coverages, deductibles and limits for each company you are comparing. You want to compare auto insurance quotes equally in order to make a good decision regarding the price of your premium.

Your state will set the insurance requirements for what coverage you need and what limits you can purchase. Each state is different; you will need to contact your state Insurance Commissioner’s office or local Department of Motor Vehicles to find your state’s requirements.

What is full coverage insurance?

Full coverage insurance includes the state mandated liability insurance, along with comprehensive and collision insurance. While the state may not require you to carry comprehensive and collision insurance, if you have a loan or a lease against the vehicle you are driving, your lender will require you to carry it.

What is the benefit of having full coverage insurance?

Comprehensive and collision insurance will cover damages to your vehicle if you should be in an accident or if you are hit by a hit and run driver. It also will cover your vehicle in the event of theft or even hail.

Comprehensive and collision take care of you and your car.

Full coverage can also include bodily injury, personal injury protection or other liability insurances. Some states have different terms for the coverages, but they all relate to your insurance taking care of damages or injuries that you cause to other property or people.

What are the disadvantages to full coverage insurance?

Sometimes this insurance is more expensive than what you are trying to insure. If your vehicle is only worth a couple thousand dollars, then you may not benefit from what you would need to pay in premiums on a comprehensive or collision policy.

If your vehicle is older, then it may not be worth the money that you would put out in premiums. You can always take that money and put it in the bank where you will have it if you need to replace your vehicle.

Full coverage is a misnomer, and is usually used to indicate that a person has added comprehensive and collision insurance to their policy. No one policy can possibly provide coverage for everything possible, so when someone talks about full coverage, they may be stating that they added those two insurance coverages.

The benefit of adding collision and comprehensive, other than this satisfies the bank’s requirements, is that you are now better protected against damages from both natural and human error.

Since there is a good chance your state will not require you to carry comprehensive and collision insurance, you need to work with your agent or insurance company to determine how much coverage you really need. You want to make sure that you cover your entire vehicle and in the case of a loan or lease, you need to make sure you cover the balance of the loan.

You need to know what your vehicle is worth and how much money you could possibly come up with in the event of an accident. If you put away $1,000 and not pay it to the insurance company, you can easily get a lower premium with a higher deductible and still have the money set aside. If you never need to use it, you are ahead both the $1,000 and the savings in your premiums.

Compare auto insurance quotes to see what the difference would be with a high deductible and a low deductible. Auto insurance comparison is quick and easy. Enter your zip code and quotes will be headed your way.