What is Full Car Insurance Coverage?

Full coverage vehicle insurance typically refers to an auto insurance policy that includes collision, comprehensive, and liability coverage. However, there is no standard definition of "full coverage car insurance," therefore you cannot obtain a policy using this word.

Indeed, what constitutes full coverage automobile insurance differs by state. Some lenders and employers may require you to get full-coverage automobile insurance.

In layman's terms, comprehensive coverage vehicle insurance gives peace of mind for a wide range of conceivable circumstances. However, it does not cover everything you would expect from a "full coverage" policy, and you will still be responsible for paying your deductible.

KEY TAKEAWAYS

·       Full coverage is commonly used to refer to coverage that fulfills state minimums plus collision and comprehensive coverage.

·       Full coverage may be necessary if you are financing or leasing a car, as well as for certain employment.

·       Consider medical payment protection, roadside assistance, gap insurance, and other policy alternatives.

·       Full coverage can help car owners avoid costly out-of-pocket repairs.

What Does Full Coverage Car Insurance Cover?

Depending on your state, a full coverage automobile insurance policy will generally contain liability, collision, and comprehensive coverage. It is critical to understand what constitutes a "full coverage" policy and how it is defined.

Liability coverage

Most states require liability coverage if you are at fault in an accident to assist cover the other party's injuries and property damage costs. For example, your liability auto insurance may pay for the other driver's medical bills, vehicle repairs, other property damages, lost income, and legal fees in the event of a lawsuit.

While liability coverage is needed in virtually every state, the minimum necessary amounts differ by kind, with bodily liability limits often greater than physical damage limitations.

These limitations may be far lower than the costs you are liable for if you cause an accident. Having "full coverage" can refer to having more than the minimum needed coverage. For example, in California, the minimum bodily liability limit is $15,000. A "full coverage" policy might contain

a bodily liability limit of $100,000.

Higher limits provide better security for any asset. If the other driver sues you for damages that exceed your limits, you may be forced to pay out of pocket and lose your assets in a lawsuit.

Comprehensive coverage.

Comprehensive coverage pays for repairs to your vehicle if it is damaged for reasons other than a collision with another automobile or immovable object. For example, many plans cover car damage caused by fires, hail, floods, falling tree branches, glass breakage, colliding with an animal, theft, and burglary.

Note: Full coverage vehicle insurance may have low deductibles, which are the amounts you pay before the insurance kicks in to cover motor damage. For example, it may have a deductible of $500 for collision or $250 for comprehensive.

Additional coverage per state

Some states demand additional coverage.

Any full coverage vehicle insurance policy may include one or both of the following coverage types:

·       Uninsured/underinsured motorist coverage: Some jurisdictions require you to obtain uninsured/underinsured motorist coverage to cover your expenses if you are injured or your property is destroyed by a driver who does not have insurance. States may mandate insurers to provide coverage, which you can then refuse.

·       Personal injury protection (PIP): coverage pays for medical bills, burial expenses, and economic losses caused by lost work or the need for assistance around the house, regardless of who is at blame. Some "at-fault" states need this insurance. Other states mandate insurers to offer this coverage.

What Does Full Coverage Car Insurance Not Cover?

It's critical to recognize that comprehensive coverage does not imply that you're completely protected against all risks. Examine all automobile insurance choices carefully to determine what is covered and what is not. All plans have exclusions, which identify the sorts of occurrences that are not covered, such as:

·       Wear and tear damage is your responsibility.

·       Gap insurance: If you wreck a leased or financed car and owing more than its value, guaranteed auto protection (GAP) insurance will cover the difference. Some lenders or insurers need complete coverage to be eligible for GAP insurance.

·       Rental car reimbursement: If you are involved in a covered accident and your vehicle requires repairs, this policy will assist you cover the cost of a rental automobile.

·       Roadside assistance or towing: If you run out of gas, get locked out of your car, have a dead battery, or require additional assistance on the side of the road, roadside assistance coverage will get you aid and decrease the cost.

·       New vehicle replacement: If your new automobile is totaled during the first year, new car replacement coverage assures that you may replace it with another of equal worth. You won't have to worry about how depreciation affects your settlement.

Full Coverage Car Insurance Costs

The average annual cost of automobile insurance (classified as liability, collision, and comprehensive) in the United States was $1,176 in 2019-2020, according to a 2023 National Association of Insurance Commissioners (NAIC) study.

The premium you wind up paying depends on a variety of criteria that are regulated by state legislation, including your:

·       Personal characteristics: Age, driving experience, gender, locality, and marital status.

·       Coverage: Coverage categories, limitations and deductibles, prior insurance coverage

·       History: claim history, credit history, driving record.

·       Auto: Miles driven, vehicle type, vehicle use

Obtaining many quotes for comparison is the most effective approach to know how much complete coverage will cost. You may readily obtain quotations from insurance providers' websites. If you're still unsure where to begin, check out our list of the top auto insurance carriers for 2024.

Note: Your first year's full coverage auto insurance costs may be able to be financed through your auto loan.

When Do You Need Full Coverage Auto Insurance?

When financing or leasing a vehicle, you are normally obliged to have full coverage auto insurance. The lender or leasing firm will want documentation that your automobile is fully insured for the duration of the loan or lease term. If you don't have insurance, the lender can purchase it

for you.

Furthermore, you may require complete coverage if:

·       Drive a pricey automobile that may be costly to fix.

·       Commute routinely in heavy traffic.

·       Cannot afford or prefer not to pay for repairs out of pocket.

·       Live in a high-risk location owing to weather, crime, or other factors such as many animals or overgrown trees.

·       Have assets you want to safeguard with greater limitations.

When You Don't Need Full Coverage Auto Insurance

Once your vehicle is paid off, you will no longer be needed to have full coverage auto insurance. At that time, you may decide whether or not to maintain collision and comprehensive coverage.

You probably won't need full coverage auto insurance if:

·       Your car's actual worth does not warrant the insurance premiums.

·       You face little chances of car damage.

·       You prefer to pay for repairs out of pocket.

·       If your present automobile is damaged, you would like to get a new one.

When Can You Drop Full Coverage Auto Insurance?

Once you have paid off your motor loan, you can cancel collision and comprehensive insurance. However, if your automobile is more valuable, you should consider preserving these coverages.
Does full coverage auto insurance cover at-fault accidents?

Full coverage automobile insurance covers the costs of repairing your vehicle after an at-fault collision. However, in most jurisdictions, it does not cover bodily harm to you or your passengers. In "no-fault" jurisdictions, your vehicle insurance will cover your bodily injuries up to the limits you paid.

Is comprehensive car insurance equivalent to full coverage?

Comprehensive automobile insurance is part of full coverage. Comprehensive coverage protects your vehicle from damage caused by incidents other than crashes, such as hail, fire, or flood. It also addresses theft and vandalism. A full coverage policy often includes state-required insurance as

well as collision and comprehensive coverage.

What are the disadvantages of full coverage?

Full coverage insurance has downsides, including a greater cost than basic liability coverage. Furthermore, it may give you the idea that the policy includes everything. To provide greater coverage, you may wish to consider adding other forms of insurance, such as guaranteed auto protection (GAP) or personal injury protection (PIP).

The Bottom Line

If you are financing or leasing a vehicle, you will often require complete coverage. It can also be useful after you've purchased your vehicle if it's pricey, has a high risk of damage, or you simply want peace of mind. However, check beyond "full coverage" to ensure you have all of the protection you want, including appropriate limits and coverage for your individual issues.