UPDATED: Apr 3, 2020
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Full coverage car insurance can mean different things to different people, depending on which insurance company you purchase a policy from.
Of course, for many providers, a full coverage policy includes the full portfolio of both mandatory and optional coverages. For the most part, the majority of major providers offer the same options: bodily injury, property damage, uninsured motorist, PIP, collision, and comprehensive.
Below, we will explain briefly what all of these options involve, the type of drivers who need them, and – more importantly – those drivers who can make their insurance policy much more affordable by leaving them out.
Full Coverage Part 1: the Necessities
Liability coverage is obviously the biggest and most important type of auto insurance coverage that you will see on your policy. No matter what state you live in, when you purchase a legally mandated auto insurance policy, it will have liability coverage on it.
Liability coverage comes in two forms: bodily injury, and property damage. These two are mostly self-explanatory. With regard to bodily injury, if you cause an accident in which someone gets hurt or killed, that type of coverage will pay out expenses up to your policy limits.
After that, the injured parties have the legal right to sue you for the remaining damages. Property damage is the same way, although it applies to things (such as the other driver’s car), not people.
Also, you should know that liability coverage only applies if you are partially or completely at fault in an accident. If you are not at fault, or if it is a no-fault accident, your liability coverage will not be used.
Uninsured motorist coverage (UM/UIM) is the next most likely form of coverage you will see on a policy, although it is not required in every single state.
This coverage protects you from situations in which the accident is not your fault, and the other driver doesn’t have enough insurance coverage to pay out the expenses that they and their insurance company owe you. It can also payout on claims if you are the victim of a hit-and-run.
Personal injury protection is another type of coverage which may or may not be mandatory, depending on your state. PIP is mandatory in all 12 of the no-fault states, but it is also a very popular form of optional coverage in almost every single state.
Personal injury protection covers you financially if you have medical expenses due to an accident in which the other driver’s bodily injury liability coverage isn’t, for whatever reason, deemed legally liable to pay out on your medical claims.
PIP can also help reduce your expenses if you don’t have health insurance, or if your health insurance is particularly stingy when it comes to paying out claims which are attributed to an accident.
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Full Coverage Part 2: Fringe Benefits
Collision insurance coverage is a type of property damage coverage you may already be familiar with, even if you don’t know very much about auto insurance.
This, along with comprehensive coverage, are the two types of car insurance coverages which require you to pay a deductible before your insurance company will make good on an approved claim.
Your deductible can range from anywhere between $250 to $1,000 (or more) depending on how much money you actually want to spend on your monthly premiums. The lower the deductible, the higher your premium. The higher the deductible, the lower your premium.
Collision coverage is used whenever you get into an accident and either there are no other drivers involved, or the other driver is not considered to be at fault enough for their liability insurance to cover your property damage.
Comprehensive coverage is a property damage coverage that helps fix or even replace your vehicle in the event that something other than an accident causes it damage. Usually, these things are acts of God, such as severe weather.
Things like hail damage, fire, crushing damage from falling debris, and other circumstances that are far beyond your control are all situations in which you should be able to file a claim and have it honored.
A few other types of optional coverage which deserve honorable mention include:
- Roadside assistance – can help with minor breakdown issues, such as running out of gas, getting your car stuck in a ditch, needing assistance with a flat tire, jumping your battery, and more
- Gap coverage – if you have a relatively new car and you are either leasing it or upside down on your current car loan, gap coverage insurance that you will get more then the actual cash value if your vehicle is damaged beyond repair in a total loss accident
- Glass coverage, theft, vandalism, and more – most basic coverage is, whether mandatory or optional, can cover these specific types of damages. Still others, like glass coverage, is a very common automatic edition (although not a mandatory one) to most car insurance policies
Who Needs Full Coverage, and Who Doesn’t?
This question depends primarily on your unique circumstances and is difficult to answer in a blanket statement.
But one simple rule of thumb is the more money it would cost for you to repair or replace your vehicle out of pocket, the more coverage you should purchase.
Older vehicles and less expensive vehicles probably won’t need as much coverage because they will be less expensive to repair or replace.
Newer vehicles and more expensive vehicles will require more coverage because of the greater financial expense in the event of a catastrophic accident. Also, regardless of the age or value of your vehicle, you should give a serious thought to how much liability coverage you want to purchase.
If you have a lot of assets that you want to protect in the event that you caused an expensive accident, then you’ll want to purchase more liability coverage.
But if you don’t have very many assets that need protecting, then it might help you to save money by purchasing less liability coverage.
Other reasons which may prompt you to purchase more coverage than less include:
- Help paying for medical bills in the event of an auto accident
- Help with property repairs or replacement in the event of an uninsured, underinsured, or hit and run driver
- If you frequently Drive rental cars
- If you no that’s you will need alternate transportation in the events of an accident
- If you travel long distance on the road frequently, or if your car is at an age where spontaneous breakdowns are more likely
- If you have a newer vehicle, especially one that you bought brand new and are still making payments on
- If you have an expensive vehicle, or if you frequently carry expensive property within your vehicle that cannot easily be repaired or replaced
- If you think you may require any other financial assistance other than what you would be liable for in the event that you are responsible for causing an accident (even partially)
We hope this article has been informative and has helped you come close to figuring out whether or not full coverage auto insurance is right for you.
Then while we’re on the subject of helping out drivers like you, we suggest that you take advantage of our quote-generating services while you’re here.
You can get 3 to 5 fast, accurate quotes from some of the best insurance providers in your area – and you can do it in a matter of minutes.