What Does Full Coverage Car Insurance Cover?

Full coverage car insurance is a term that generally means your policy includes liability, comprehensive, and collision insurance. While insurers don’t offer a specific “full coverage” option, drivers can build a comprehensive policy by adding various types of coverage. Here’s a breakdown of what full coverage typically includes:

• Liability coverage: Covers the cost of injuries to others if you cause an accident. Most states require a minimum amount of liability insurance.
• Comprehensive coverage: Covers damage to your car that isn’t caused by an accident, such as weather events, vandalism, and theft.
• Collision coverage: Pays to replace or repair your car after a collision you caused.

Extra Coverage You Can Add to Your Policy

Beyond the basics, you might choose to add extra coverage to enhance your protection. Here are some additional options:

• Uninsured/underinsured motorist coverage: Protects you if you or your passengers are injured in an accident caused by an uninsured or underinsured driver. Damage to your car is also covered.
• Personal injury protection (PIP) coverage: Covers accident-related medical expenses for you and your passengers, regardless of who’s at fault. Some policies also cover additional costs, such as lost wages.
• Roadside assistance: Helps with lockouts, towing, and more if you’re stranded.
• Rental car reimbursement: Covers the cost of a rental car if your car is in the shop.
• Gap coverage: Covers the difference between your car’s value and your outstanding car loan if your vehicle is totaled.
• Car repair insurance: Covers issues like transmission problems, engine issues, or problems related to electrical systems, but certain conditions must be met.

Pros and Cons of Full Coverage Car Insurance

Pros

• Better protection: Full coverage offers more robust protection, providing peace of mind and reducing out-of-pocket costs if you experience a covered event.
• Medical expense coverage: If you opt for PIP coverage, your policy should cover medical bills if you or your passengers are hurt in an accident.
• Convenience: Adding perks like roadside assistance or rental car reimbursement can make life easier if you encounter unexpected car trouble.

Cons

• Higher cost: Adding additional coverage will increase your insurance premium. The amount you pay will depend on your level of coverage and factors like your insurer, age, driving history, and car type.
• Potentially unnecessary: You may end up never using all the extra coverage, making it an expensive addition.
• Limitations: Even with full coverage, some situations may not be covered, such as normal wear and tear or non-mechanical issues.

Do I Need Full Coverage Car Insurance?

Each state in the U.S. has different car insurance requirements, but almost all states require liability coverage. According to the Insurance Information Institute, 80% of all drivers have comprehensive coverage, and 76% have collision coverage. Consider your current situation when deciding whether full coverage is right for you:

If You’re Leasing

If you lease a car, the lessor will likely require you to have an insurance policy that includes comprehensive and collision insurance on top of your state’s minimum requirements. Many also require gap protection and higher liability limits.

If You Have an Auto Loan

If you finance a car with an auto loan, your lender will likely require full coverage car insurance, which generally includes comprehensive and collision coverage on top of liability insurance.

If You Own Your Car Outright

If you own your car outright, you technically only need coverage that’s required by your state. This can vary, but most states have a minimum requirement for liability coverage. However, most experts recommend carrying at least 100/300/100 liability coverage.

Frequently Asked Questions

How Much Is Full Coverage Car Insurance?

The cost of full coverage car insurance varies based on factors like your insurer, age, driving history, and car type. On average, full coverage car insurance costs $1,765 per year.

How Do I Get Full Coverage Car Insurance?

To get full coverage car insurance, you can start by contacting your current insurer or shopping around for quotes from different providers. Make sure to compare the coverage options and premiums to find the best policy for your needs.

How Do I Save Money on Full Coverage Car Insurance?

To save money on full coverage car insurance, consider bundling your policies, maintaining a good driving record, and taking advantage of discounts offered by insurers. Shopping around and comparing quotes can also help you find the best rates.

When Does It Make Sense to Drop Full Coverage Car Insurance?

It may make sense to drop full coverage car insurance if your car is older and has a lower value, or if you can afford to cover potential repair or replacement costs out of pocket. Evaluate your financial situation and risk tolerance before making a decision.

The Bottom Line

Full coverage car insurance offers better protection and more comprehensive coverage, which can be useful if you experience a covered event and need to file a claim. However, you’ll likely pay more in premiums. Whether it’s right for you will depend on your risk tolerance and financial situation. Shopping around and comparing car insurance quotes can help you find the right policy.

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