What does 'full coverage' in automobile insurance usually refer to?

Full coverage in automobile insurance primarily refers to a combination of both collision and comprehensive coverage. Collision coverage protects against damages to your vehicle resulting from a collision with another vehicle or object, while comprehensive coverage covers a wider range of non-collision-related incidents, such as theft, vandalism, or natural disasters. Together, these two coverages provide extensive protection for the insured vehicle, which is why they are commonly referred to as "full coverage."

The concept of full coverage is often misunderstood, as it does not imply total protection against all risks or that it includes liability coverage, which is necessary for damages to others. Therefore, while it provides significant protection, it’s essential to understand the limits and exclusions that may apply. This distinction is crucial for insured individuals to ensure they meet their financial protection needs effectively.