Types of Full-Coverage Car Insurance
There are three types of auto insurance coverage: liability insurance, collision insurance, and comprehensive insurance.
Think of full-coverage car insurance like a BLT. If you order a BLT (full-coverage), it’s got to have bacon (liability insurance), lettuce (comprehensive insurance), and tomato (collision insurance). Without all three, it’s not a BLT!
Remember, comprehensive and collision coverage are optional coverage. You can still order a sandwich that isn’t a BLT and leave off comprehensive auto insurance from your policy. And it might be cheaper.
If your lender says you need a full coverage car insurance policy, that means you need comprehensive and collision coverage. Liability insurance is the insurance that’s required for you to drive legally in the first place. So a full-coverage policy has all three. Make sense?
Liability coverage is legally required for drivers in almost every state (it’s optional in New Hampshire and Virginia). This provides insurance for when you are at fault in an accident, covering any medical expenses and repair costs you’re responsible for. Liability insurance has no deductible, but it does have coverage limits. The higher the limits, the higher the insurance premium.
Because liability coverage only covers damage to other vehicles and people that you are liable for, many drivers find reason to buy insurance that protects their own vehicle should they be involved in a collision. If someone else is found at fault, their insurance might cover your damage—but if no one’s at fault or you hit something by yourself, collision coverage helps.
Lots of stuff can happen to your car even if a car accident isn’t the reason for the damage. Vandalism, theft, and damage from natural disasters like hailstorms and fires aren’t covered by insurance companies unless you have comprehensive coverage.
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