Full coverage car insurance is likely a term you’ve heard referred to. Perhaps it was your friend’s idea to bring it up, or perhaps your loan provider insisted on it. But what is it, and more importantly, is it the best value for you?
First, let’s keep it simple that ‘full coverage’ is not a blanket policy. Instead, it is a shorthand expression for an array of coverages that together insure other motorists and your car.
Types of Car Insurance
Typically, it includes:
- Liability Insurance: It covers costs if you injure someone else or damage their property. (Most states make this compulsory.)
- Collision Insurance: It pays for repairs to your vehicle in the event of an accident, no matter who is at fault.
- Full Coverage: Insures damage to your vehicle from non-collision incidents such as theft, vandalism, fire, or hitting animals.
Do you know if you should cover everything in one policy? Just ask yourself these three easy questions:
Is Your Car Leased or Financed?
The response is almost always yes if you have a car loan or lease. Because they have a financial interest in your car, your leasing or lending company will require full coverage car insurance until it is paid for. This protects the investment by ensuring that, in the event of a total loss, the car can be repaired or replaced.
How Much Is Your Car Really Worth?
To a car owner who has actually paid for his car, this is the most significant factor. Compare the current market value of your vehicle with the cost of comprehensive and collision insurance for a year, plus your deductible.
Here’s a simple way to put it into perspective – If your car is older and its value has fallen significantly, you might be paying more in premiums than you’d ever see in a claim. On a car worth a few thousand dollars, it might be wiser to stick with robust liability protection.
What’s Your Personal Risk Tolerance?
Insurance is all about handling risk. Ask yourself:
- How would you pay for repairs if your vehicle was hit-and-run?
- Would you be able to fully replace my vehicle if it were stolen?
- Is having peace of mind knowing that you’re covered for the surprise expenses worthwhile?
If it’s bothering you about that enormous surprise repair bill, the comfort of a full cover insurance for car policy might be worth it.
Getting a Policy That You Can Afford
You’ve decided that full coverage is for you. The next question is, how do you obtain affordable full coverage car insurance? It’s a matter of smart shopping:
- Bundle Up: One of the easiest ways to save is to ask about a multi-car policy insurance discount if you have more than one vehicle. Covering all your cars under one company can lead to tremendous savings.
- Raise Your Deductible: Shelling out a larger deductible (what you pay before insurance) will reduce your monthly premium.
- Shop Around: Prices vary dramatically from company to company. To find a good price, compare full coverage auto insurance quotes from a variety of companies.
The Bottom Line
It’s not a one-size-fits-all situation. Your best choice will really just be based on the value of your vehicle, your budget, and your personal need for coverage. If you’d like to see how much full coverage would cost for your specific vehicle, pulling full coverage insurance quotes that are specific to your information is the fastest way to have your questions answered.
Get your personalized rate and find out how much you can save now.
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