What Is Full Coverage Automobile Insurance?

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Full coverage auto insurance is required if there is a lien on a vehicle, and it refers to both collision and liability insurance. Find out why it's a good idea to have collision insurance on a new car with help from the chief operating officer of an insurance business in this free video on full coverage auto insurance.

Part of the Video Series: Auto Insurance
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Video Transcript

Full coverage auto insurance is required if you have a lien on your vehicle. If you bought a vehicle and you're making payments on it then the, the lien-holder, which is typically a bank or a finance company, will require you to have full coverage which means collision and liability. State law only requires you to have liability insurance, which covers, which covers if you're liable for the accident, like if you hit someone else and your liability insurance covers the other person's vehicle. Collision covers your vehicle and that's why most finance companies and bank, or all finance companies and banks require you to have collision at a certain amount because you know, if you get in a wreck, they want, you know, the money to be paid, or the car to be fixed. You know, they don't want a car that's, you know, beat up, and it's worth twenty thousand dollars. So, all lien-holders require you to have it. As, and you can have collision insurance even if the car is paid for, you don't have to. If you have the, hold the title to the vehicle you do not have to have collision insurance. But you do need to think about what the car is worth, and I, I would say if the car is five years or newer then it's definitely worth having the collision on there because if you get in a wreck and only have liability, again, your vehicle is not going to be fixed.

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