Auto insurance has been around for a long time, but in 1970 it became mandatory for most people.
If you’re looking for coverage options, you may wonder, what is full coverage car insurance? Two types of car insurance are most popular: full coverage and liability insurance. Knowing the differences between these two options is integral to making the right decision for your situation.
Let’s examine what full coverage is and why you need to have it.
If you’re making payments, most loans require that you maintain full coverage in order to protect their investment. This is a universal requirement, and failing to have full coverage can lead to your vehicle getting repossessed. If your vehicle is repossessed, you will lose any equity you had built up in it.
Liability insurance is a basic form of insurance that helps mitigate the costs of an accident or lawsuit. In this way, it helps defray the costs of medical bills, repairs, and any punitive damages that may occur.
It is safe to consider liability insurance as the easiest and cheapest insurance to have. A lot of people save money by switching to liability once their vehicle is paid off. The reason it is so cheap is that it puts all financial risk on you, paying little or nothing for any trouble you have.
Full Coverage Insurance
So what is full coverage car insurance? It is insurance that covers any liability, incident, or accident you may be involved in. From having a window damaged by a neighbor mowing to collision insurance, full coverage does it all.
The only thing that holds you back with full coverage insurance is the associated insurance costs and deductible. The deductible is how much you have to pay before the insurance takes care of the rest of the bill. The higher your deductible, the less expensive and less useful full coverage insurance becomes.
The Cost of a Collision
A lot of people who switch from full coverage to liability do so thinking that they won’t need coverage. The cost may be too much for them, or they may think their vehicle isn’t worth it. The reality is that a collision costs a lot more than repairs to a vehicle.
If you’re at fault for an accident, you could end up paying medical bills, repair costs, and lost time compensation. That’s just the start, as car accident costs can total a tremendous sum. Without full coverage insurance, you are left on the hook for the total cost of the accident.
What Is Full Coverage Car Insurance
What is full coverage car insurance? It is the only way that you can handle the threat of a car accident unless you have a lot of money in savings. It is a safety net that can keep you from being financially ruined for a single accident or mistake.
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