Full coverage car insurance is a combination of insurance policies that pay to repair damage caused to your car and others. The coverage policies usually combined are liability insurance, comprehensive insurance, and collision insurance.
Though not an actual insurance type that you’ll find on your auto policy, full coverage car insurance hopes to be an all-in-one package meant to reimburse financial damages not only to the car you hit but to your car as well.
Auto insurance companies do this by allowing you to select the minimum insurance coverage for almost all states, which is liability insurance that caters to the auto repair of others, as well as other coverage options that cater to the repair and replacement of your car such as comprehensive, collision, and other insurance types.
So, you’re not going to see a quote from your car insurance company specifying “full coverage car insurance,” rather you’ll see a list of auto insurance options that you’ve selected to shield you wholly from the financial impact of a car accident.
What does full coverage mean on a car?
Full coverage on a car means that you’ve signed up for more than one type of car insurance to offset the costs of damages and bodily injuries to both your car and others. You’ve most likely taken on liability coverage, along with collision and comprehensive coverage.
The need for full coverage came about because the minimum car insurance requirement in most states is a liability-only policy that caters only to the injuries and property damages you caused to others in a car accident.
You don’t benefit from that, as your car still remains in terrible shape. It doesn’t cover your medical costs, which could see you staying out of work for a while and losing money till you recover.
So, there was a need to add at least collision and comprehensive coverages to your liability coverage and package it into a single package called full coverage car insurance, so that your injuries and car damages can also be addressed by your insurance company.
Related: How Does Collision Insurance Work?
What is included in full coverage insurance?
Full coverage insurance includes:
- Liability coverage: This covers all injuries and property damages to others in a car accident where you’re at fault. The coverage is two-fold – bodily injuries and car repairs, including property repairs like fences or mailboxes.
- Collision coverage: This caters to the reimbursement of damages to your car in accidents where you collide with other cars or objects such as trees or fences.
- Comprehensive coverage: Comprehensive coverage covers damages to your vehicle from non-collision events such as vandalism, fire, theft, storms, attacks from wild animals, or losses from natural disasters.
Also Read: What Is Car Liability Insurance?
Some people might find that these policies don’t cover them fully from every shade of setback from car accidents, such as medical costs like needing money for surgeries. So, they add other coverage policies that cover medical expenses.
Others might find that they need to add other policy options because of the state laws for minimum car insurance requirements. For example, uninsured motorist coverage is required in a few states.
So, other coverage options that are typically added to the full coverage insurance are:
- Uninsured and underinsured motorist coverage: Uninsured motorist coverage takes care of the payout for repair costs and bodily injuries when you get hit by a driver without insurance. Underinsured motorist coverage covers the property damages and injuries for you if you get hit by a driver whose insurance policy limit isn’t enough to offset the repair costs.
- Medical payments coverage (MedPay): This covers the medical costs of you and your car passengers if you get involved in an accident.
- Personal Injury Protection (PIP): This coverage not only takes care of your medical costs like MedPay, but it also covers your lost wages as a result of the accident and expenses that you can’t do while recovering such as house cleaning.
- Towing and labor coverage: Also called roadside assistance, this is an optional add-on that handles the cost of getting your car moving again when it suddenly breaks down on the road. All expenses associated like towing the car to the mechanic, changing the car tires, changing batteries, oil or gas delivery, and even hiring the assistance of a mechanic or auto personnel of your choice are taken care of.
There is no specific amount of coverage policies required in your full coverage insurance. Two people can have two completely different coverage options included in their full coverage because it addresses their separate needs.
All you need to do is select the auto insurance policies that totally cover your needs in the event of a car accident, then add it to your full coverage car insurance.
Related: How to Get Car Insurance
What’s the difference between full coverage and regular insurance?
The difference between full coverage and regular insurance is that full coverage combines regular liability insurance with other auto insurance options that help you bounce back from a car accident, rather than just the person you hit.
Regular insurance, which is liability insurance in most states, caters to the injuries and property damages of the person you hit without a deductible, leaving you stranded in the process.
Full coverage adds other insurance policies like collision and comprehensive that comes with deductibles, to give you a soft landing and reimburse you for any loss you might have after the auto accident.
Is full coverage better?
Full coverage is only better when you have a new and expensive car, but if your car is old and has depreciated in value so much that your premium is 10% or more of your car’s value, or your deductible is higher than the value of your car, then a liability-only coverage is better.
Who needs full coverage car insurance?
You need full coverage car insurance if your car undergoes frequent commuting or you live in a highly hazardous environment prone to storms, earthquakes, animal attacks, or theft.
You will also need full coverage if you leased or financed your car, as your lender needs to be well compensated if your car gets damaged before your auto loan is paid off.
Besides, most lenders will always insist on a full coverage policy to protect their interest, anyway.
You’ll also need a full coverage policy if you have a new or expensive car, as you stand to benefit the most from it then.
Can I select parts of a full coverage car insurance?
Yes, you can select the parts of a full coverage car insurance you want since full coverage is a bundle of different car insurance policies.
You can decide that you want to add only collision coverage and towing and labor coverage to your liability insurance, leaving out comprehensive coverage and others.
People select different policy options they want as they suit their peculiar needs and leave out others.
There is no full coverage car insurance bundle that’s cast in stone. You can select the auto insurance types you want and leave out others.
Also Read: How Does Comprehensive Insurance Work?
Does full coverage cover engine problems?
Full coverage generally doesn’t cover engine problems, unless you prove to your insurer that the engine problems resulted from a covered claim like earthquakes, natural disasters, or storms, which is catered for in a comprehensive insurance policy.
If you need your engine problems covered without any explanations, opt for mechanical breakdown insurance.
What is the difference between full coverage and collision coverage?
The difference between full coverage and collision coverage is that collision coverage reimburses you for repair costs if your car collides with other cars or objects while full coverage is likely to involve collision coverage and other coverage options such as liability coverage that covers the injury and property damage of cars you hit, as well as comprehensive insurance that settles you for repair costs involving non-collision events and natural disasters.
Related: How Does Car Insurance Work?
How to get the best out of a full coverage car insurance
The ways to get the best out of full coverage car insurance include:
- Drive extremely carefully: Do your best to avoid car tickets and Driving Under the Influence (DUI) auto mishaps, as they can linger on your driving record, causing auto insurance lenders to increase your premium.
- Ask for discounts you’re qualified for: Car insurance companies offer so many auto insurance discounts on many things such as combining home and car insurance, safe driving, the presence of certain professional qualifications, and a host of others. Surely, you must qualify for one. When you find those you qualify for, take advantage of it and reduce your premium.
- Raise your deductible: A higher deductible means that you’ll pay a low premium. This can prove to be cost-effective in the long run if you add a finely-honed, safe driving skill to it.
- Consider working on your credit report: Some states consider your credit score and the general state of your credit report when determining the cost of your policy. A good credit score goes a long way in proving that you’re financially capable and trustworthy to undertake an auto insurance policy.
Is full coverage worth it?
Full coverage is worth having in several situations, especially when you just got a new car. It offers total protection from the financial hiccups gotten when you crash into someone else’s car or your car gets hit.
It might not be beneficial to have full coverage when your car is over ten years old because it must’ve depreciated so much. The current cost of the old car is likely to be lower than the cost of having full coverage car insurance.
It is also worth having full coverage when you lease or finance a vehicle. Your dealer would require you to have both comprehensive and collision insurance anyway, and the state would insist that you get liability coverage. Full coverage is the best option in this scenario.
Full coverage is essential if you cannot afford the cost of replacing your vehicle out of pocket during an accident. The combination of collision, comprehensive, and liability insurance offers fool-proof protection against financial debt.
