These questions don’t have an easy answer as policies vary from one insurer to another but there are certain guidelines that can help you understand what full coverage really implies and up to what extent you will be protected by it.
This is an important issue because many people think that they can just feel confident and act recklessly because the auto insurance that they have purchased fully covers all damages and liability. Not only it is not true but knowing the degree of protection that your particular policy offers is essential for you to be really safe when driving your car or letting someone else use it.
Full coverage consists of two separate coverage types: liability coverage and property coverage. Property coverage is also divided in two: comprehensive coverage (which can also be subdivided) and collision coverage. We will explain each type later on but it is important to keep this in mind to know what insurance companies mean when they offer you FULL coverage.
Therefore, full coverage implies that you will be protected for almost all if not all the risks associated to owning and driving a vehicle. The problem is that each type of coverage protects you up to a certain extent. There are amount limits that will determine how much the insurance company will pay in the event of an accident on each and every category included in the full coverage.
Property coverage protects you against losses of the vehicle and, as stated above, can be divided into comprehensive coverage and collision coverage. Collision coverage protects you against damage, partial or total destruction of the vehicle due to a car crash. Depending on the type of policy you may get your car replaced or an amount paid to cover for all the loses.
As regards to comprehensive coverage, it refers to almost all the other causes of property damage like theft, wreckage and fire. In the event of such hazards occurring, the insurance company will, just like with collision coverage, repair the car or replace it if possible or eventually, provide the funds needed to fix the vehicle or purchase a new one depending on the type of policy you purchase.
Liability coverage protects you against the loses you can cause to property or people during a car accident or because of your car. Liability coverage completes the protection provided by full coverage as there are little to no extra risks that remain not covered. The problem is that liability coverage protects you only up to a certain extent. Most liability coverages have limitations in terms of amount and people. Therefore, if the damage caused is more expensive or there where more people affected, the liability coverage may not fully protect you.
The only solution you have is to raise the coverage to higher amounts which implies of course, higher premiums. But nevertheless, you will only be more protected, and never fully protected. Therefore, remember: full coverage implies that you are covered from all possible risks but only up to a certain extent and thus, conscious driving, safety measures and eventually a good legal advisor are a must.