New York State Property and Casualty Licensing Practice Exam 2026 - Free Property and Casualty Practice Questions and Study Guide

"Full coverage" is commonly understood in the context of auto insurance as a combination of liability, collision, and comprehensive coverages. This terminology reflects the idea that a driver has a level of protection that addresses various types of risks associated with owning a vehicle.

Liability insurance protects the policyholder against claims resulting from injuries or damages to other people or their property, which is a fundamental requirement for all drivers. Collision coverage provides protection for the policyholder's vehicle in the event of an accident, regardless of who is at fault. Lastly, comprehensive coverage safeguards against non-collision-related incidents such as theft, vandalism, natural disasters, or hitting an animal.

Since "full coverage" encompasses these three essential components, it provides a broader level of security for drivers compared to other types of coverage such as liability only or comprehensive alone. This combination ensures that drivers are protected from a wide array of potential financial losses related to vehicular incidents.