Yeah, I am telling the truth. Full coverage isn’t an actual coverage option. When you talk about full coverage, you are talking about comprehensive and collision coverage and in some places either one is considered full coverage. What is the breakdown of these coverages?
Let me just make it real simple for you.
Comprehensive coverage will cover your car in the case where there is no accident involved. I used to call this glass, vandalism, and theft coverage when I was an insurance agent full-time. This coverage is what you use when it wasn’t anyone’s fault that your car was damaged and generally there was no accident. There is one exception to this rule and that is if you hit an animal while driving. This coverage will cover that as well.
Here are some examples of when this is used: a tree falls on your car, a hail storm, your car is keyed, or your window cracks.
Collision coverage will cover your car when you are in an accident. It doesn’t matter who is at fault. It also doesn’t matter what the accident is with or how it happened. You can have hit a tree, a shopping cart, or caused an 80-car pile-up on the freeway. It is all the same coverage that will cover this problem. If you have collision coverage, your car will be covered for its value.
Now, if someone hits you, you can and should file the claim on that person’s insurance. It will save you in the long run sometimes. You also will not have to pay a deductible to the other guys insurance like you probably will for your own. You are not required, however; to file under their insurance and I suggest if you have a hard time with them, don’t. You have every right to file on your own policy.
You will probably notice that you have different deductibles on these coverage options. That is what you will need to pay before any coverage will be paid. Comprehensive coverage is actually very low-priced. Most insurance companies break down the prices on your paperwork, so look it over. This is often a used policy option as well. I recommend everyone at least consider having this coverage even on older low valued cars.
Collision coverage is the more pricey option that you may want to compare the price of the coverage to the value of the vehicle before making a buying decision for this coverage. This is especially true for older lower valued vehicles. If you have a $2,000 valued vehicle and the coverage costs $400 per renewal, you will be paying for the car with 5 renewals. You may want to consider saving that cost and investing it into a savings account for the same purpose. (The purpose is to pay for car in case of an accident.) If you save the money instead of buying the insurance, you may be ahead in long run. Change the page though and if you have a $30,000 vehicle, you may be more than willing to pay for the coverage and be assured that your vehicle will be covered should something happen.
Banks will require that you carry both of these coverage options, if you have a loan. Banks are loosening their requirements to allow you to carry a $1,000 deductible however, and keeping that higher deductible can save you some money.
So when someone talks about “full” coverage for your car. You should really get the details of what they are talking about. Are they talking about just comprehensive coverage, or just collision coverage, or are they talking about both options?