“Pros and Cons of Full Coverage Car Insurance Explained”

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What Does Full Coverage Car Insurance Cover?

Each state has its own minimum car insurance requirements, but increasing your coverage can offer better protection. Full coverage car insurance generally includes liability, comprehensive, and collision insurance. You might also add other extras to enhance your policy. However, full coverage car insurance has its drawbacks. Let’s explore how it works, what it covers, and whether you need it.

What Does Full Coverage Car Insurance Cover?

Insurers typically don’t offer a “full coverage” option. Instead, drivers build it by adding different types of coverage to their policy. A full coverage policy usually includes:

• Liability coverage: Covers the cost of injuries to others if you cause an accident. Most states require a minimum amount of liability insurance.
• Comprehensive coverage: Covers damage to your car that isn’t caused by an accident, such as weather events, vandalism, and theft.
• Collision coverage: Pays to replace or repair your car after a collision you caused.

Extra Coverage You Can Add to Your Policy

Beyond the basics, you might choose to add extra coverage for more protection. Here’s a quick breakdown of additional coverage options:

• Uninsured/underinsured motorist coverage: Protects you if you or your passengers are injured in an accident caused by an uninsured or underinsured driver. It also covers damage to your car.
• Personal injury protection (PIP) coverage: Covers accident-related medical expenses for you and your passengers, regardless of who’s at fault. Some policies also cover additional costs, such as lost wages.
• Roadside assistance: Helps with lockouts, towing, and more if you’re stranded.
• Rental car reimbursement: Covers the cost of a rental car if your car is in the shop.
• Gap coverage: Covers the difference between your car’s value and your outstanding car loan if your vehicle is totaled.
• Car repair insurance: Covers issues like transmission problems, engine issues, or electrical system problems, subject to policy conditions.

Note that some states may have their own laws regarding which of these extra coverage types you’re required to carry.

Pros and Cons of Full Coverage Car Insurance

Understanding the benefits and drawbacks of full coverage auto insurance can help you decide if it’s right for you.

Pros

• Better protection: Full coverage car insurance offers more robust protection, providing peace of mind and reducing out-of-pocket costs for covered events.
• Medical expense coverage: If you opt for personal injury protection coverage, your policy should cover medical bills if you or your passengers are hurt in an accident.
• Convenience: Adding perks like roadside assistance or rental car reimbursement can make life easier if you encounter unexpected car trouble.

Cons

• Higher cost: Adding additional coverage will increase your insurance premium. The amount you pay depends on your level of coverage and factors like your insurer, age, driving history, and car type.
• Potentially unnecessary: Extra coverage can be pricey, and you may never use it all. Consider how the benefits and costs fit into your budget.
• Limitations: Even with full coverage, some situations may not be covered, such as normal wear and tear or non-mechanical issues.

Do I Need Full Coverage Car Insurance?

Each state in the U.S. has different car insurance requirements, but almost all states require liability coverage. According to the Insurance Information Institute, 80% of drivers have comprehensive coverage, and 76% have collision coverage. Consider your current situation when deciding whether full coverage is right for you:

• If You’re Leasing: Lessors typically require comprehensive and collision insurance, gap protection, and higher liability limits.
• If You Have an Auto Loan: Lenders usually require full coverage car insurance, including comprehensive and collision coverage.
• If You Own Your Car Outright: You only need the coverage required by your state, which can vary. Most experts recommend carrying at least 100/300/100 liability coverage.

Frequently Asked Questions

• How Much Is Full Coverage Car Insurance?
• How Do I Get Full Coverage Car Insurance?
• How Do I Save Money on Full Coverage Car Insurance?
• When Does It Make Sense to Drop Full Coverage Car Insurance?

The Bottom Line

Full coverage car insurance offers better protection and more comprehensive coverage, which can be useful if you need to file a claim. However, it comes with higher premiums. Whether it’s right for you depends on your risk tolerance and financial situation. Shopping around and comparing car insurance quotes can help you find the right policy.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We’re here to help you with all your mortgage needs!

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