What is Full Auto Insurance Coverage?

When purchasing a full coverage policy in auto insurance, ask yourself one question, do you think you are fully covered? The expression "full coverage" may be attractive to the policyholders because many people think that they are covered completely under all circumstances. But the reality is that all the coverage options do have its own limitations, although it is marketed as being fully covered. On the whole, it consists of a liability coverage which is offered as a single package along with the comprehensive and collision protection for the insured vehicle.
Generally, the liability part of the policy will be very specific. The coverage limits can be specified in three portions namely:
1. The highest the insurance company will pay out on "per person basis" for all the medical injuries done by the policy holder.
2. The highest medical injury payouts on "per accident basis" which means the payouts for multiple persons.
3. The entire amount of any property damage payouts on per accident.
The policy holder has the right to change these limits based upon the coverage he needs. Many of the carriers will only offer the minimal coverage limitations and hence it is necessary to choose a good company which offers the best options to ensure that they offer your preferred protection. The insurance company will be willing to pay only the amount specified or indicated on the declarations page. They pay only what is agreed to when the application is signed.
Selecting a low limit with insufficient coverage may leave you susceptible to a greater financial loss. In case, you caused damage which exceeds the coverage limits specified by the insurer, the remaining amount (not covered) needs to be paid by the insured out of his pocket. It is hence good to consider a higher coverage to protect the personal assets especially.
Even the comprehensive and collision part of the full coverage is a bit confusing. The insurance company is obligated only to pay the actual cash value of the vehicle and not that is to be paid towards the loan. In case, a person who has purchased a new automobile is caught up with an accident, the insurer does not pay off the full amount which the person has spent for purchasing the car but only the cash value is paid. There are rules that the carriers need to abide to. They pay the property damage claims on the basis of "blue book value". They do not pay the retail value. If you need to know better, it is good to learn how the auto insurance companies estimate the value of your vehicle. As soon as you purchase a new car and drive it off only for a few minutes, the vehicle value will be depreciated automatically by many thousands of dollars.
Hence if you wish to be covered fully, it is essential to understand the unknown truths behind the full coverage packages to prevent any unexpected outcomes. You need to understand well that many of the options are provided only on requests though they are specified to cover everything. For example, if you need to cover all medical payments necessary for all the passengers, it has to be requested separately and not included automatically in a full coverage package. The other options that may be additionally included to protect you are Rental Car Reimbursement, Uninsured Motorist Protection, Towing and many more. So do not get fooled by the mention of full coverage, it is better to enquire well before deciding upon which coverage best suits your requirements.