Last week I discussed What is Collision Auto Insurance. I find many people have a relatively decent understanding of collision coverage. Comprehensive coverage, however, tends to give people more trouble. This week I am going to breakdown comprehensive coverage, discuss what it is and also what it is not.
The first question that I ask consumers who are shopping for insurance is, “why are you shopping for insurance today.” The responses that I get differ, but there are a few reoccurring ones that come up from time to time. The most common response is, “My insurance rates keep going up, and I have never had a claim!”
Choosing auto insurance coverage is a complicated matter. Somehow it became common knowledge for consumers to ask their insurance agent for "Full Coverage," and that would take care of all their insurance needs. I am not sure where the term "full coverage" originated from, but I am not a fan of it. In the insurance industry, there is no such thing as "full coverage." The insurance company will always limit the amount of coverage they offer. So when someone asks me for "full coverage," all they are telling me is that they do not know what they need or want.