"Full coverage" is a common term used in auto insurance. It often refers to a package that includes liability, collision, and comprehensive insurance. It can also include other options that you may want or need. Policies and coverage offered by insurers will vary by state. It's up to you to decide what you need.
Full coverage is the level at which you think you can take on any financial burden for damage to your car or to others. Learn more about your options so you can decide what you need to be fully covered.
What Is Full Coverage Insurance?
Full coverage often is a combination of coverages that are required by your state or needs. There's no auto policy called "full coverage" that will cover any and all damage that might happen to or with your car. Be wary of any agent who claims that this is the case.
Liability covers your responsibility to the other driver or to their passengers for injury and property damage. It's required in nearly every state.
Collision coverage applies to damage that occurs to your car while it's being driven.
Comprehensive coverage pays for things that happen to your car outside of a collision.
Every state in the U.S. can set its own requirements. These often include bodily injury liability and property damage liability. Some states also require insurance for uninsured or underinsured motorists. Some require medical payments coverage.
Your lender may require only that you meet your state's minimum requirements if you're financing your car, or it may require collision and comprehensive as well.
How Does Full Coverage Insurance Work?
Your coverage depends on the policy you choose. Your carrier may offer other options.
Medical Payments and Personal Injury Protection
Medical payments and personal injury protection are provided at the level set by state law. These help pay the costs of care for you or others who are in the auto with you. It may also cover lost wages and other expenses that stem from injuries suffered from the accident.
Uninsured or Underinsured Motorist Coverage
Some states require coverage to protect you in the event that you collide with an uninsured or underinsured driver, or if the other driver flees the scene. Their insurance, if any, may not be enough to pay for medical expenses. Check with your state to see what it requires.
Collision coverage covers damage to your car if you are at fault in an accident, whether your car strikes another vehicle or an object, such as a fence. It doesn't cover damage to the other person's car.
You'll choose your coverage limits, and the amount you must pay as a deductible. These amounts will affect your premium. Your lender may require this coverage if you bought your car with a loan. It's often an option otherwise.
Comprehensive coverage pays for damage to your car that wasn't caused by a crash. This would cover events such as fire, theft, storm damage, animal damage, or falling objects. Comprehensive insurance helps pay for damage to your car that is outside of your control.
Other Optional Coverage
You might think that towing and car rentals are included with full coverage. But that's not always the case. Discuss your options with your agent so you aren't caught by surprise. You might be able to add a few options to your policy at minimal cost.
Gap insurance is also known as loan or lease payoff insurance. You should request it if you're taking out a loan for a large portion of your auto's value. You'll have to pay for that "gap" out of pocket unless you have this coverage if you owe more on your loan than your car is worth, and you have an accident or your car is stolen. Auto value depreciates fast, so this could be worth the cost.
Towing and Roadside Assistance
Roadside assistance is often packaged with full coverage. This often includes towing, along with services such as changing a flat tire or jumping a dead battery.
Car Rental Coverage
Some insurers offer a limited amount of car rental reimbursement when you purchase full coverage. This coverage isn't always listed, so you have to ask what your policy offers.
You can often choose a certain amount of rental coverage per day, so be sure you choose enough to cover a vehicle that would fit your needs.
Insurers don't always use parts straight from the car manufacturer, also called the original equipment manufacturer (OEM). They may require cheaper or used parts for repairs instead. But some insurers will offer a rider that allows you to get OEM parts if you request it.
Full Glass Coverage
Glass damage falls under comprehensive coverage. It's automatically covered when you choose full coverage. But it could wipe out your glass coverage if you opt for a high deductible on your comprehensive plan. You pay a higher premium to get no deductible with full glass coverage, or at least a lower deductible for glass claims only.
A vanishing deductible rewards you with a discount for every year of safe driving. Not all insurers offer it. This coverage often doesn't come automatically with a full coverage policy. It's offered at extra cost. You must add it before a loss occurs.
Do I Need Full Coverage?
Some coverages are required by law or by lenders. But many of them come down to your own preference.
It may be smart to protect against a major liability in the event of an accident if you don't have a lot of money saved. You should purchase coverage that addresses most events and that grants you a low deductible in this case. But keep in mind that you'll pay for that coverage through high premiums.
You might elect to choose less coverage or higher deductibles if you have plenty of money saved so you could absorb much of the cost of an accident. But medical expenses from an accident can be far more costly than buying a new auto. Your agent can help you think through the risks and help you decide.
- There is no exact definition for full coverage auto insurance.
- You must decide which options to add to your policy based on state laws, lender rules, and your own financial picture.
- The more extensive your coverage, the more expensive your car insurance policy will be.
- Your agent can help you decide on options that give you peace of mind.