Question

What insurance do i need if i am financing a car

Full coverage? I don't even know what that really means.

May 15, 2018 Englewood, CO

Answer
Ava Lynch

May 15, 2018

Dealerships and sometimes insurance companies thrown around the term full coverage but it really can mean a lot of things. Usually, it's referring to collision and comprehensive coverage. So, if you want roadside assistance, rental car reimbursement, or uninsured motorist coverage, you should specify you want these coverages. The coverage I recommend adding or considering is uninsured motorist coverage (both bodily injury and property) and loan/lease payoff coverage. The former provides protection if you're hit by an uninsured driver. In Colorado in 2016, an estimated 16% of drivers were uninsured - 4% higher than the national average. The second coverage option I would consider, loan/lease payoff, looks like gap insurance. If you were to total your financed vehicle, your insurance company would only compensate you for the value of the vehicle minus depreciation. However, the loan you received from your bank doesn't factor in this deprecation. So, loan/lease payoff helps prevent you from being underwater on a loan. For more information, see our guide to car insurance for a financed vehicle.  Ready to start shopping? Get started comparing here.


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