What is Considered Full Coverage Auto Insurance?
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UPDATED: May 28, 2021
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Are you in the market for a new auto insurance policy, but you are not really sure what you need for coverage? Many people just stick with the bare minimum amount of liability insurance that is required by the states they live in, but this is not always enough coverage. Other people decide that they want more coverage, and they opt for a full coverage policy.
A lot of people have different ideas about what is considered full coverage auto insurance, because what one person considers full coverage another person may think is not enough. In actuality, there isn’t any such thing as complete full coverage, and if you get an offer from an insurer promising you will have full coverage, you need to really think about it before making your final decision. It may just be that you are going to end up paying for a lot of coverage you don’t need, or that you won’t be getting nearly as much coverage as you think you should have.
Comprehensive, Collision and Liability Combined
When you are trying to figure out what is considered full coverage auto insurance, you really only need to think about three things: comprehensive, collision and liability coverage. When you get the minimum amount of insurance that you are required to have in order to drive your car legally, you only have liability coverage. If you opt for full coverage, you will get both liability and comprehensive insurance. Here is a breakdown of the two different types of coverage:
- Liability Insurance – All states require drivers to carry a certain amount of liability insurance. If you are in an accident and you are at fault, this insurance is used to pay for any damages that are caused to other drivers, pedestrians, etc. Having liability coverage proves your financial responsibility by making sure that you have enough money to pay for any damage that you cause when you are behind the wheel. You can choose to have the limit that is set by your state, or have more liability insurance if you can afford it and you feel you need additional coverage.
- There are two types of liability insurance: bodily injury (covers medical expenses) and property damage (pays to replace or repair damages to property).You need to remember that this type of coverage is not going to pay for any of your own damages. You will have to pay your own expenses out-of-pocket, unless you have the right type of insurance coverage. The cost to have liability coverage depends on a number of factors, including your driving history, the limits you choose and the type of vehicle you drive.
- Comprehensive Insurance – If you want what is considered full coverage auto insurance, your policy is going to include comprehensive coverage. This coverage will pay for damages to your vehicle caused by situations other than accidents. For instance, your comprehensive coverage will pay to replace your vehicle, up to a certain limit. Other types of situations that are covered by comprehensive insurance include fires, flooding and damage caused by other types of natural disasters. Depending on your policy, there may be exclusions, but your policy will explain everything that your comprehensive insurance covers. Comprehensive insurance policies have a deductible, which must be paid before any claim can be paid out. Let’s say that your car is stolen, and the cost to replace it is $10,000. If you have a $500 deductible, the amount you will end up receiving is $9,500 after the deductible has been taken off. This type of insurance will not cover any damages you have that are a result of an accident. For this, you will also need to have collision coverage.
- Collision Insurance – If you are in an accident and you are at fault, you need to have collision insurance or you will have to pay for any repairs or vehicle replacement yourself. This is insurance that covers you while you are driving, and your vehicle. You are not required by law to carry this type of coverage, but if you are renting, leasing or financing a vehicle, your lender may require that you have it. When you buy collision insurance, you get to decide the policy terms. What you need to remember is the limit you choose to have is the most that your insurer is going to pay out if you have to make a claim for damages following an accident.
- As a rule, most people have about $100,000 in collision coverage, but you can have more or less, depending on your needs. You will also have to pay a deductible before receiving any payout from a claim, which is usually $500. Again, you can choose to have a higher or lower deductible.
This is the basic breakdown of what is considered full coverage auto insurance. Most full coverage policies include at least the minimum required amount of liability insurance, as well as the chosen amounts of comprehensive and collision insurance. You may also have other coverage included, such as uninsured/underinsured motorist insurance which is necessary if you are in an accident with someone and they do not have any or enough insurance, and personal injury protection.
Saving Money on Full Coverage Auto Insurance
Now that you know what is considered full coverage auto insurance, you can start shopping around for the best prices. Remember, every insurance company is different, and they are all going to offer you different products and rates, as well as incentives to go with their services. It is never a good idea to take the first policy you are offered, because another insurer may have something even better. This is why you need to get quotes from many different insurers, including the national insurers.
We can help. Give us your zip code, and we will search our databases to get quotes from national insurers as well as many insurers in your area. Once you have your quotes, you will be able to see which insurer has the products you want and need, at a price that is competitive and reasonable.