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What the heck do they mean by full coverage? Do I need it?




In a nutshell:


Full coverage includes New York State mandatory liability and medical coverage, as well as physical damage to repair your car.


In 2015 the United States witnessed 33,244 fatal motor vehicle accidents, resulting in 36,096 deaths.


According to the National Highway Traffic Safety Administration, more than 6 million car accidents occur every year in the United States.


Let's discuss 2 common auto insurance terms to help you decide:

In broad terms, full coverage and liability only.


When they say full coverage, they usually mean your policy will include physical damage coverage for your car, and New York State mandatory coverages. Physical damage for your car with full coverage means that your insurance company will pay to repair your car.


Most normal collision accidents are usually your fault. Your car getting hit while parked is an example of a not-at-fault collision accident.


Comprehensive Insurance pays to repair your car for fire, theft, and flood. Damage that is only to the glass, and damage caused by an animal, are generally considered NOT at fault accidents.


Loss of use: Your insurance company will pay for you to rent a car while your car is out of service, and they are paying to repair your car.


Towing and labor: The insurance company will pay to have your car towed if it breaks down or runs out of gas.


Coverage which is mandatory in New York State includes body injury liability, which pays if you hurt a person with your car, and property damage - which pays to repair damage caused by you to someone else’s car, house, guard rail, or telephone pole


PIP - personal injury protection, otherwise known as “No Fault insurance” pays for you and your passenger’s medical bills and loss of wages, no matter who is at fault.


Liability insurance, on the other hand, only covers injuries and damages to third parties and their property when you are at fault. The liability insurance does not cover your car damages in case of a collision resulting from your mistake. Full coverage will cover and protect both you and those you hit.


Do you need physical damage coverage? Well, that depends.


Can you afford to repair your car if there is an accident that is your fault?


Is your car’s value worth paying for the coverage?


On a new car, it’s a no-brainer. Yes, you need it!


You just spent $25,000 or more on a car!


The more your car ages, the trickier it is to determine whether you should get full coverage.

Is full coverage worth the cost of the insurance?


It’s not an exact science. If the cost of the comp and collision insurance is $300 per year, and your car’s value is, say, $10,000 dollars, then I would say yes. Pay for the coverage.


But if the cost of the comp and collision is $1,000 per year, and your car’s value is $2,500, then I would say no, don’t buy the coverage.


Check edmunds.com or nada.com for rough estimates on your car’s value. If you have any other questions about insurance, reach out to Joyce Insurance Agency.

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