Paul Sanchez
Full coverage auto insurance is a term used by lenders, agents, and insurers to refer to a combination of liability and physical damage coverages, including comprehensive and collision insurance. However, it is important to note that there is no standard definition of full coverage and it does not mean that you are 100% covered in all situations. The specific coverages and limits can vary depending on state requirements and individual needs. Liability coverage is mandatory in almost all states and covers damages or injuries caused to another person or their property. Comprehensive and collision coverages are optional but protect your own vehicle from damage caused by accidents, theft, vandalism, or natural events.
| Characteristics | Values |
|---|---|
| Full Coverage Defined | There is no standard definition of "full coverage" for car insurance. It typically refers to carrying both liability and physical damage coverages (comprehensive and collision). |
| Liability Coverage | Mandatory in almost all states. Covers damages/injuries to another vehicle or person, up to a certain limit. |
| Comprehensive Coverage | Optional, unless required by your lender or lease company. Covers damage to your vehicle caused by events in and out of your control, such as theft, vandalism, fire, flood, hail, and hitting an animal. |
| Collision Coverage | Optional, unless required by your lender or lease company. Covers the repair or replacement of your vehicle when it hits or is hit by another vehicle or object, regardless of fault. |
| Uninsured/Underinsured Motorist Coverage | Optional. Helps protect you if you're involved in an accident with someone who doesn't have enough insurance or any insurance at all. |
| Medical Payments Coverage | Optional. Helps pay medical and funeral expenses if an insured person is injured or killed in an accident. |
| Additional Coverages | Optional coverages include roadside assistance, rental car reimbursement, and emergency road service. |
What You'll Learn
What does full coverage mean?
The term "full coverage" auto insurance is misleading as no single policy delivers 100% coverage. There is no standard definition of "full coverage" for car insurance and no insurer can sell a policy where you are completely covered in all situations.
In most cases, when an insurance company, agent, or lender references full coverage, they are referring to comprehensive and collision coverage, plus any other coverages required by your state. Comprehensive coverage includes damage to your vehicle from vandalism, theft, weather events, and accidents involving animals. Collision coverage, on the other hand, includes damage to your vehicle from colliding with another object, such as a vehicle, tree, or retaining wall, regardless of who is at fault.
Full coverage auto insurance also typically includes liability insurance, which offers financial protection if you are at fault for an accident. This includes bodily injury liability coverage and property damage liability coverage.
In addition to the above, full coverage auto insurance may also include other types of coverage, especially if required by state law. This could include uninsured/underinsured motorist coverage, personal injury protection, medical payments, and gap insurance.
Insurance and Vehicle Registration: What's the Link?
You may want to see also
What does liability insurance cover?
Liability insurance coverage protects you financially if you're responsible for someone else's injuries or property damage. It is mandatory in almost all states and is included in most vehicle and property insurance policies.
Liability insurance consists of two types of auto coverage: bodily injury liability protection and property damage liability protection. Bodily injury liability covers the medical expenses of the other party if you are at fault in an accident. In some cases, it may also cover lost wages and/or legal fees if the injured party files a lawsuit. Property damage liability protection covers damages to property resulting from an accident where you are at fault. This includes the other party's vehicle repair or replacement costs, as well as other property that may have been damaged, such as fences, structures, or phone poles.
The minimum liability limits for each of these coverage types vary depending on the state. For example, liability coverage limits for vehicles are typically represented by three numbers, such as $25,000 for bodily injury per person, $50,000 for bodily injury per accident, and $25,000 for property damage per accident. When choosing a liability coverage limit, it is recommended to select a limit that matches or exceeds your total net worth to adequately protect your assets.
It is important to note that liability insurance does not cover your own injuries or damaged property. It only applies when you are legally responsible for someone else's damages. To protect yourself and your vehicle, you may consider adding comprehensive and collision coverage to your policy, which are optional coverages that protect your vehicle from damages caused by events in and out of your control.
Dealerships: Test Drive Insurance
You may want to see also
What does comprehensive insurance cover?
Comprehensive insurance is an optional coverage that protects your vehicle from damage caused by incidents other than a collision. This includes damage caused by animals, vandalism, theft, fire, and weather events. It is important to note that comprehensive insurance does not cover damage to other vehicles or people.
Comprehensive insurance is often referred to as "full coverage" insurance, but it is important to understand that there is no single policy that provides 100% coverage in all situations. When insurance companies refer to "full coverage," they typically mean comprehensive and collision coverage, plus any other coverage required by your state.
Comprehensive insurance covers a wide range of unexpected events, such as:
- Vandalism, fire, and explosions
- Windshield and glass damage
- Falling trees, branches, or other objects
- Rocks or objects kicked up by cars
- Severe weather, including storms, hail, wind, floods, lightning, and earthquakes
- Accidents with animals, such as hitting a deer
Comprehensive insurance is typically required by lenders if you lease or finance your vehicle. If you own your vehicle outright, you can decide whether to purchase comprehensive coverage based on the value of your car, your financial situation, and your personal preferences.
Comprehensive insurance provides peace of mind, knowing that you are covered for a variety of unforeseen events that could damage your vehicle. It is essential to review your insurance policy and understand the specific coverages included in your comprehensive insurance.
Non-Standard Auto Insurance: Who's Covered?
You may want to see also
What does collision insurance cover?
Collision insurance covers the cost of repairing or replacing your car after a crash. It covers you if you collide with another vehicle or object, such as a lamppost, tree, mailbox, or curb. It also covers you in the event of a hit-and-run, a rollover, or if your car is damaged by an uninsured or underinsured driver. Collision insurance is typically required by lenders if you are financing or leasing your car. It is optional if your car is paid off, but it can provide peace of mind if you drive an expensive car or wouldn't be able to afford repairs after a crash.
Collision insurance will not cover damage to your car from non-traffic events, such as theft, vandalism, extreme weather, or animal collisions. It also does not cover damage or injuries caused to others while driving, medical costs for you or your passengers, personal belongings inside your car, or normal wear and tear.
If your car is damaged but not totaled, collision insurance will pay to repair your car to its previous condition, minus your deductible. If your car is totaled, collision insurance will pay the actual cash value of your vehicle, minus your deductible. Without collision insurance, you could be left with thousands of dollars in repair costs or the cost of a new vehicle.
Collision insurance is often purchased in conjunction with comprehensive coverage, which covers events outside of a driver's control, such as theft, vandalism, fire, hail, or animal collisions. Together with liability insurance, collision and comprehensive insurance are typically referred to as "full coverage" insurance.
Gap Insurance: Volvo Lease Inclusion?
You may want to see also
What are the benefits of full coverage?
Full coverage auto insurance is a combination of comprehensive, collision, and liability coverage. It provides coverage for most scenarios, including damage to your car from weather, an at-fault accident, hitting an animal, or vandalism. Here are some benefits of full coverage:
Peace of Mind
Full auto coverage covers many circumstances you could find yourself in if your car is stolen, damaged by weather or vandalism, or if you are involved in an accident. This can give you peace of mind when driving, knowing that you are protected financially in most situations.
Protection of Assets
Full coverage protects all of your assets that may be impacted in the case of a serious car accident. If you are involved in a crash, your insurance will cover the costs of repairs or replacements, keeping you financially stable. This includes repairs to your vehicle, which can be costly, especially if it is a newer model.
Medical Bills Coverage
Full coverage can help with ongoing medical bills for you and your passengers if you are injured in a crash, especially if the accident involves an uninsured or underinsured motorist. Medical bills can be extremely expensive, and full coverage provides valuable protection in this regard.
Protection Against Uninsured Motorists
Uninsured motorist coverage is highly recommended, especially in states with high unemployment rates. If you get into an accident with an uninsured driver who is at fault, your property damage and medical fees will likely be covered under full coverage.
Replacement or Repair of Vehicle
Full auto coverage will help you replace or repair your car if it is damaged or totaled in an accident. This ensures you can get back on the road and back to your regular routine as soon as possible.
While full coverage auto insurance does not cover every possible scenario and will increase your insurance costs, it offers valuable protection and peace of mind for you and your vehicle.
BECU: Gap Insurance Options
You may want to see also
Frequently asked questions
While there is no standard definition of "full coverage" car insurance, it typically refers to carrying both liability and physical damage coverages (comprehensive and collision), in addition to any other coverages required by your state.
Collision insurance covers the repair or replacement of your vehicle if it overturns or collides with another vehicle or object, while comprehensive insurance covers damage to your vehicle from events other than a collision, such as theft, fire, vandalism, or hitting an animal.
Liability coverage pays for another party's medical expenses, vehicle repairs, and property damage if you are responsible for an accident. It is mandatory in almost all states.
Uninsured motorist coverage protects you if you're in an accident with someone who doesn't have liability insurance, while underinsured motorist coverage protects you if the other driver doesn't have enough insurance to cover your damages.
You can check the details of your policy using your insurer's mobile app or online portal. If you see both collision and comprehensive coverage listed under your vehicle, then you have full coverage for physical damage.
