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LSDefine
Simple English definitions for legal terms
full coverage
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A quick definition of full coverage:
Full coverage refers to an insurance policy that provides complete protection without any deductions. This means that if something happens that is covered by the policy, the insurance company will pay for the entire amount of the loss. It is important to understand what risks are included in the policy, as this is known as the coverage. Additionally, some insurance policies may offer dependent coverage, which provides protection for the insured's dependents. In a different context, full coverage can also refer to the ratio between a company's pretax income and its liability for bond interest payments.
A more thorough explanation:
Definition: Full coverage refers to insurance protection that pays for the full amount of a loss with no deduction. It is the inclusion of a risk under an insurance policy, covering all the risks within the scope of the policy.
- Car insurance that covers all damages to your vehicle, as well as damages to other vehicles and property in an accident, is an example of full coverage.
- Health insurance that covers all medical expenses, including hospitalization, surgery, and prescription drugs, is another example of full coverage.
These examples illustrate how full coverage provides complete protection against potential losses. In the case of car insurance, full coverage ensures that all damages are covered, regardless of who is at fault. Similarly, with health insurance, full coverage ensures that all medical expenses are covered, providing peace of mind and financial security.