Do You Need Full Coverage Car Insurance?

If you have ever bought or shopped for car insurance, you may have heard or saw the term "full coverage". Essentially, full coverage is having a policy which exceeds the minimum, and carries all the basic types of car insurance. The tricky thing about it? It's completely optional to have. To drive in the U.S. you are only required to carry the minimum. Just like an extra credit assignment though, opting for full coverage could be well worth it.

So What is Full Coverage Exactly?

Full coverage car insurance is a policy that includes bodily injury liability (BI), property damage liability (PD), under/uninsured motorist insurance (UMI), collision, comprehensive and sometimes personal injury protection insurance (PIP). Those are all various parts of car insurance, each covering different things, for different people. Let's break it down.

BI and PD are liability insurances, which are used to pay for other people's damages. BI takes care of their injuries while PD takes care of any car or structure damages. Only another driver can file a claim through them; their sole purpose is to ensure if you crash into someone causing damage, you can pay for it.

The second part of full coverage is collision, comprehensive, and PIP . These insurance types are considered "first party benefits" and they are meant for the policyholder to pay for their own damages. Collision will cover you from having to pay for damage to your own car, even if you were the one to cause the damage. Comprehensive coverage includes damage to your car that is caused by an external force, such as a storm, vandal, or errant baseball. Personal injury protection is used to pay for your own medical bills, if you are injured in an accident

Why You Should Consider Full Coverage

No one likes to think about getting into a car accident, but it is important to be prepared--especially for the aftermath. The post-accident time can be incredibly stressful, more so if you are dealing with injures. You need to file claims, get damage appraised, deal with adjusters; a process that can be easier or harder depending on the type of coverage you have.

If you only have basic insurance, then you will need to file a claim through the other driver's insurance company. This process can take months to sort out, and may require a lawyer, which comes with hefty fees. All the meanwhile, you will have to pay out of pocket for any expenses until you settle the claim. In the end, there is still a good chance you won't even get the exact amount you wanted.

If you have full coverage, however, any injuries you sustained would be taken care of through your PIP, while damage to your car would have been taken care of through your collision insurance. Both claims would not require any fault to be proven, since it is your own policy, through your own company. So, while getting into an accident is rare, when it does happen, full coverage will make the process much smoother.

Unfortunately, It Isn't Exactly Cheap

Overall, we found the national price for full coverage. For one, setting a higher deductible for collision and comprehensive is a way to reduce your monthly payments. Secondly, you can reduce your premium through discounts. Discounts for being a good student, being a safe driver, or having another policy with the insurance company are just a handful of discounts that can reduce your premium by as much as 20%.

Lastly, and perhaps the easiest thing you can do, is to shop around. Car insurance prices can differ by thousands of dollars just within a single city. There are so many companies, each with their own pricing methods, the odds are that whatever you are paying now can probably be found at a cheaper price in your neighborhood.

Source: [http://www.huffingtonpost.in/entry/do-you-need-full-coverage_b_11818966]