"Full Coverage"
Full coverage in auto insurance means that when you get into an accident and it is your fault it will cover the costs to replace the vehicle that you damaged AND your own vehicle IF you pay the deductible to have your own vehicle replaced. The vehicle you crashed into if it is your fault and you have insurance will automatically be covered when reported.
Full Coverage When Buying a New Car
If you are buying a car and you are financing the car, the finance company providing the loan on the vehicle is generally going to want you to have “Full Coverage”.
So what exactly does this mean?
Full coverage means you have two deductibles. One for “collision” and one for “comprehension”.
“Collision” insurance is going to be mandatory. Especially in states where auto insurance is required by law.
“Comprehensive” insurance can be optional if you want to pay out of pocket for your own damages.
If you have a loan on the car the finance company is going to require you to have a deductible of at most $1,000 in most cases for both collision and comprehensive insurances.
So if you completely total a $30,000 car and you owe $25,000 on it still, the finance company and you yourself are not out of luck! You get a new car for just the deductible!