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The term "Full Coverage" refers to Comprehensive and Collision coverage on an automobile insurance policy when combined with the liability limits you choose.  There is no such thing as "Full Coverage" because the automobile policy is not designed to pay for any possible risk and the terminology can be very misleading to consumers.  "Full Coverage" is more like "very good coverage" but it doesn't mean that you won't have to pay anything out of your own pocket if you have a loss. 

Lets take a look at Comprehensive and Collision Coverage.  Collision coverage will pay for damage to your vehicle, listed on the policy, for a collision with another vehicle or property minus the deductible, normally at the actual cash value of the vehicle at the time of the loss.  Comprehensive coverage is very similar, but is designed to pay for other things that cause damage to your vehicle, like hail, if you hit a deer, theft, broken windows, etc.  Your deductible will apply to both coverages. 

Many policies have additional optional coverages you can buy for the following: rental reimbursement when you need to rent a car, road trouble service for things like flat tires or running out of gas, and GAP coverage when you purchase a new vehicle and the loan balance you have may be more than the actual cash value of your car. 

It's also important to realize different insurance companies have different definitions of what is "covered" so you need to read the policy or ask your insurance agent for clarification if you have any questions. 

Posted 10:00 AM

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Taylor Bishop said...
Thanks for helping me understand car insurance more. You mentioned that there could get additional coverages as well, like a rental reimbursement. I wouldnt mind knowing if there are other ones that werent mentioned.

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