The Definition of Full Coverage Auto Insurance
Do you want full coverage car insurance?
The term gets tossed around frequently when speaking about car insurance. However, do you know what it means? It may not be as cut and dry as you think.
First of all, let’s get one thing straight: There is no way to purchase a car insurance policy that will keep you from paying anything but the deductible in every conceivable bad situation that happens while you’re behind the wheel or to your car while you’re away. There are, however, combinations of coverage that give you the “fullest” protection and covers the most likely scenarios, reasonably insulating your wallet from potential harm.
Full coverage can be interpreted in different ways, and it is not a specific coverage offered by insurance carriers. Your agent does not hit a “full coverage” checkbox on your policy, and you are ready to go. It is a term which has evolved and is well known in the insurance industry, but insurance carriers do not use a laid out set of guidelines which they all follow.
Generally, full coverage is a combination of collision coverage and comprehensive coverage, which protects you and your vehicle in the event of an accident, and liability coverage, which pays for damage you could potentially cause to others.
The Core Group
- State Minimum Requirements: Every state in the U.S. can set its state minimum requirements for auto insurance. The state minimum requirements typically include bodily injury liability and property damage.
- Comprehensive: Comprehensive coverage will cover physical damage for all the things that can happen to your vehicle other than a collision. Full coverage cannot be possible without comprehensive coverage. Fire, theft, vandalism, storm damage, hitting a deer, windshield coverage, and more are covered by comprehensive.
- Collision: Collision coverage is the coverage that gives you the broadest protection and is always included in full coverage auto insurance. Collision coverage ensures your vehicle will be covered regardless of what causes the damage. Collision covers damage for all accidents and since collision cannot be purchased without comprehensive coverage anything other than an accident will still be covered.
- Medical Coverage / Personal Injury Protection: Don't forget your medical coverage. Many policies do come with a minimum dollar amount for medical. Personal Injury Protection is provided at the level set by the states which require it. Optional increased limits are usually available so be sure to check this coverage over with your insurance agent.
Don't Be Fooled by Extras Not Automatically Included
Extra car insurance coverage is where the line starts to get blurred when it comes to full coverage. If you state the words full coverage, maybe you assume it means every insurance coverage available. Maybe you think roadside assistance is automatically included with the term full coverage. One lesson you do not want to learn the hard way is to think you are covered for something when you are not.
- Uninsured Motorist / Underinsured Motorist: These coverages can easily be overlooked if you are not familiar with the coverage. It is important to understand the coverage and determine if it is something you want. Insurance agents can easily drop this coverage off of your quote to low ball your rate and beat other quotes. If you opt out of this coverage, make sure you do it knowingly and are not surprised down the line.
- Gap Insurance: Buy a new vehicle, request full coverage, and expect gap insurance, not necessarily. Gap insurance is a coverage you need to request up front. A good agent will offer it to you, but you can't always rely on it. Do not assume gap insurance is automatically included with full coverage auto insurance.
- Towing: Towing is probably the most commonly packaged coverage included with full coverage auto insurance. It can be disappointing when you are stranded and call your agent only to find out you do not have coverage. Specify if you want roadside assistance.
- Car Rental: Some insurance carriers do offer a limited amount of car rental reimbursement when you purchase full coverage auto insurance. Sometimes the coverage is not listed, so you have to ask what your policy offers. If car rental is an important coverage to you, make sure to request it at the time you set up your policy.
- OEM Endorsement: If you have never had an auto insurance claim, you may not be aware insurance companies do not use parts straight from the car manufacturer. Aftermarket parts and used parts are used to repair vehicles. Upon request, some insurance carriers offer additional coverage to get OEM parts; do not plan on it being included with full coverage, though.
- Full Glass Coverage: Glass damage is automatically covered when you choose full coverage insurance because it would fall under comprehensive coverage. However, if you opt for a high deductible on comprehensive, it could wipe out your glass coverage. With full glass coverage, you pay a higher premium to get no deductible or at least a lower deductible for glass claims only. Check into full glass coverage if you go with a deductible on comprehensive coverage.
- Vanishing Deductible: If the insurance carrier you select offers vanishing deductibles, be aware the coverage usually does not automatically come with a full coverage policy. It is typically offered for an additional cost which would need to be added to your policy before a loss occurs.
Be careful when it comes to using the phrase full coverage auto insurance.
Since it can be taken to mean different things, you need to be specific when selecting coverage. If car insurance terminology is foreign to you, start by learning the basics and ask questions until you feel comfortable with the subject.