What Will Full Coverage Insurance Pay on My Car?

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Car Insurance Coverage Explanation....5

Full coverage insurance is designed to protect the owner in the event of a few specific situations. Find out what full coverage will pay for on your car with help from a fee-based insurance and risk management consultant in this free video clip.

Part of the Video Series: Auto Insurance
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Video Transcript

Hi, I'm Dan Weedin, I'm a nationally recognized insurance consultant, and today we're going to talk about full coverage and how it pays on your auto insurance. I'm asked all the time, Dan, how will insurance pay, if I'm involve din an accident? I've got full coverage, what does that really mean? Here's what it means. From a liability standpoint, in other words, if you're at fault in an accident, the insurance company is going to pay the other person for their loss. So, if they've had damage to their car, or damage to their body. That's going to pay for their medical and for the cost of fixing their vehicle, it's going to pay them directly. You have no deductible on that, that's important to note. No deductible on liability, insurance company pays first dollar to the people that were either injured or had property damage. Now, on your own vehicle, what full coverage means is, comprehensive and collision, those are terms you're familiar with. It's going to pay for damage to your car, because of either something that happened through your fault or not through your fault. So, it could be anything like, a glass breakage, which is comprehensive, or an at-fault accident, where your car is also damaged, that's collision. In this case, you're helping to self-fund that, you've got a deductible. The lower the deductible, the more your insurance cost. The higher that you're willing to take on, maybe you have a higher risk tolerance and can afford to pay a little bit more for comprehensive and collision. Then, your insurance premium is lower. But they will pay that directly to you and subtract out what your deductible is. So, if you've been involve din an accident, say, and you have 1500 dollars damage to your vehicle, with a 500 dollars collision deductible. You'll get check for a thousand dollars to pay off the damage to that vehicle. So, that's what full coverage is. In addition, you may have something called uninsured motorist. This is very important, because the coverage is for you, not for the uninsured motorist. If you are in an accident and let' say, you're rear ended by somebody who doesn't have an insurance, or doesn't have enough insurance. This is where your policy picks up and pays first dollar again, no deductible. Pays first dollar to damages to you or to your vehicle. So, we have liability coverage that covers the third party, the other people. You have first party that covers your physical damage, the comprehensive and collision, the damage to your vehicle. And then, finally you have uninsured motorist, which takes care of you. In case, you are involved in an accident and the other person does not have adequate insurance. Again, I'm Dan Weedin, today we were talking about full coverage and how a company pays on your auto insurance. Thanks for watching.

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