If you have ever received a quote for auto insurance, you may have heard the term “Full Coverage”. Many insureds have a hard time understanding what “Full Coverage” actually means.
Full Coverage is when you have the state required liability and coverage for damage to your vehicle. If you decide to not have coverage for damage to your vehicle, then that is called “Liability Only”. You must have full coverage if you wish to have extra coverage like glass coverage, roadside assistance, and rental car coverage. There are two coverages associated with damage to your vehicle, comprehensive and collision. Collision is coverage (after a deductible) for a loss when the vehicle was in motion and hit another object (excluding animals). Comprehensive is for anything else (hail, theft, fire, hitting animals, Etc. ).
The next question would be, when do I need full coverage and when can I go liability only? First of all, if you have a lien holder or lessor, you will be required to have full coverage according to your contract. You are not required to have extra coverage, but you must have comprehensive and collision.
Looking at the value of your vehicle is also important when you are choosing which path to take. If your vehicle’s value is below $2,500 then a very small claim can total the vehicle. Then you will have to pay for your deductible and salvage value before you can get a check for the actual cash value of your vehicle. You can pay for the repairs, but the carrier may follow up on the repairs if it is declared a total loss in order to continue coverage. You will save more money each year if you go liability only and pay for repairs out of pocket or not at all. This is usually the case for older vehicles that are not antiques yet. Liability is required for every vehicle in the state of Texas.
If you do not have insured on a vehicle, you can have your license suspended or worse.
As always, it is best to talk to your agent about the best path. Give us a call today. 972-763-0500.