Each state has some type of minimum requirement for automobile insurance. You must have at least this minimum to be able to register and drive the vehicle on city and state roads. However, what some people may not be aware of is that the minimum coverage does not pay for any damage to your vehicle if you are found to be at fault for the accident. Of course, you can purchase more coverage that will ensure you won't be stuck paying for the repairs yourself. If you want to be sure that your car will be repaired regardless of who caused the accident you will need to purchase collision insurance. In addition, comprehensive coverage will pay to have the vehicle repaired when the damage was not caused by a crash but by something like a flood or a tree falling on it.
Having collision and comprehensive coverage in addition to the liability coverage required by the state is referred to as full coverage auto insurance. This extra coverage is going to raise the price of your policy but will save you a lot of money if there is ever damage to the auto. Here are a few situations where you will want have full coverage.
Lien on the Car
If you are still paying for the car, the lending company will insist you have full coverage. They need to be sure that if there is any damage to the vehicle they will be able to get their money out of it. If the damage is not repaired, the car is not worth as much and they will lose money. In fact, if you do not have full coverage on it, the lender will often purchase the coverage and add it to your monthly payment. Of course, they may charge a premium to do this.
Cost of a New Car
If you do not have the funds to purchase another vehicle if yours is damaged and undriveable, you should purchase full coverage. It may cost you more every month but it ensures that you won't be without transportation while trying to save for a new car.
Car's Worth
If your car is still worth more than the extra expense of full coverage, it is a good idea to pay for the insurance. Find the value of your auto and then consider one year's worth of collision and comprehensive coverage. If the car is worth more than the insurance, keep it. If the insurance is more, let it go.
Other than when there is a loan on the car, buying full coverage auto insurance is up to you. However, be smart about it. The added expense monthly could save you a lot in the long run.
To learn more about full coverage auto insurance, contact a car insurance provider in your area.
