Full coverage car insurance suggests a combination of auto insurance coverage for your vehicle. Although typically not marketed as such, “full coverage” suggests a full level of protection that is appropriate for a new vehicle. At a minimum, it is insurance that covers you and your vehicle. With full or extended coverage, other features come in that we will examine below.
Who needs full coverage car insurance?
Because full coverage auto insurance is a non-specific term, it is important to examine what levels of insurance are available where you live. From there, you will add what is appropriate for your needs as well as what is required by law, your lender, or the leasing company. Thus, “full coverage” for one individual may mean something different to another consumer.
The most common type of car insurance coverage is liability insurance. Required in all states except for New Hampshire and Virginia, liability coverage includes bodily injury and property damage. Keep in mind if you do not have liability coverage, you are still legally responsible if you are at fault.
Bodily injury coverage helps pay for another person’s medical bills if you caused the accident. Usually, there is a maximum payable amount per person injured and a maximum payable amount per accident. Property damage liability coverage pays for repairs you cause to another person’s vehicle or property. For both coverages, you can choose minimum protection or you can pay for higher limits, which will also increase your insurance costs.
If your vehicle is damaged for reasons not involving a collision, then this is where optional comprehensive coverage applies. This may cover losses stemming from an animal strike, vandalism, hail, and theft. Unless you finance or lease your vehicle, comprehensive coverage is optional.
Not all vehicles require collision coverage, but if there is a lien on it, then such coverage is required. A lien means that the company financing or leasing the vehicle holds the title. In this case, your insurer would make payment to the lienholder.
Collision coverage helps reimburse you for the cost to repair or replace your vehicle if it is damaged by another vehicle or hits a stationary object such as a wall. Collision coverage kicks in whether you are at fault or not. Further, there is no payout limit, unlike most other coverages.
Both comprehensive and collision coverages come with deductibles and limits. With the deductible, you absorb the first $500 before the insurance pays the remainder. You can set your deductible lower or higher, which will affect your insurance premium. Further, you can opt for a higher limit and that will affect your rates as well.
Personal Injury Protection (PIP)
Never assume that your standard health insurance offers you protection when you are in a car accident. Instead, personal injury protection (PIP) helps cover medical expenses caused by a car accident. PIP coverage may be used whether you are at fault or not. Further, you can purchase PIP to protect family members who live with you. PIP coverage is required in some states.
Also known as underinsured motorist coverage, this kind of coverage protects you if the other driver does not have enough or any car insurance. Depending on the insurer, you may find coverage for your vehicle and in some cases for bodily injury. Available and required in some states, this coverage protects you from at-fault drivers with insufficient insurance coverage. This type of coverage encompasses loss of income, medical expenses, pain and suffering, and funeral expenses.
Rental Car Reimbursement
Another optional coverage plan is rental car reimbursement. This plan kicks in only when your insurer is covering the repairs to your vehicle. If the other driver is deemed at fault, their liability insurance will reimburse you. Rental car coverage is only used for an accident. It does not cover vacation rentals or routine repairs.
Insurers also offer roadside assistance coverage. Notably, if your car breaks down and needs to be towed, a tow truck may be requested to bring your vehicle to a repair shop or your home, depending on the policy.
Best Full Coverage Insurance
Full coverage car insurance is not a term used by insurers. That said, for consumers wanting the best protection, it may include each of the coverages mentioned. Minimally, the protection you need is what is required by your state and lender or leasing company. It is up to you to determine the remaining coverages, deductibles, and limits.
Lastly, review your current policy to verify your coverage. Obtain a quote to discover your options.