A vehicle is a huge investment. Next to a house, it is probably the second largest investment an individual can make. Auto insurance protects that valuable investment. Minimum auto insurance is all that is needed to legally drive in most states, but full coverage automobile insurance certainly provides more benefits in terms of protection.
full coverage automobile insurance has a lot of different components. Liability insurance, which is the minimum insurance required in most states, covers the damage done to other persons or property if the policyholder is believed to be at fault in an accident. There are three numbers in liability insurance, typically put in terms like 50/100/25. This pertains to how many thousands of dollars are covered by liability insurance. It is written based on personal injury/property damage/medical bills, respectively. If an insurance holder is deemed responsible by the law enforcement in an accident, the individual whose property is damaged is entitled for $50,000 for personal injury, up to $100,000 to repair or replace property and up to $25,000 for his medical bills. Liability insurance cannot protect the policyholder who is at fault.
Another component of full coverage automobile insurance is collision insurance. If a policyholder’s car is moving and strikes anything like another car, a tree, a building, then the damage to that car is covered under collision insurance after he has paid the deductible. Basically, the lower the deductible, the higher the premiums paid. This type of insurance also covers the vehicle if it is damaged by someone who does not have insurance.
Comprehensive insurance is also part of full coverage automobile insurance, but if bought alone, it is usually packaged with collision insurance and works in a similar way. The difference is that in order to be covered, the automobile of the policyholder should not be moving. Comprehensive pays for everything that liability and collision do not, such as fires and floods. Also, this type protects the policy owner if the vehicle is vandalized or stolen while parked. There are measures to lower the cost of comprehensive insurance. The policyholder can put a theft-deterrent system and his overall policy rates may be reduced.
Uninsured/underinsured driver insurance covers the insurer if not at fault in an accident with a person who has inadequate or no insurance at all. This takes care of the policyholder’s medical bills or other expenses related to the accident, which only works if an accident is both not the insurer’s fault and the other driver has no insurance at all.
An individual can always choose from any of these components but with full coverage automobile insurance, he will have peace of mind because he can be provided with all the protection he needs.
