Full Coverage Auto Insurance: Maximizing Occupant Protection

Full coverage auto insurance is a combination of insurance coverages that protect a driver financially for damages to their vehicle, the occupants of their vehicle, and other vehicles and passengers in an accident. While there is no consensus on what full coverage means, it typically includes liability, collision, and comprehensive insurance. This provides coverage for most scenarios, including damage to your car from a collision, non-collision sources, or extreme weather. It is not a legal requirement but may be mandated by lenders or leasing agencies.

Full coverage includes liability, collision and comprehensive insurance

Full coverage auto insurance is a combination of insurance coverages that protect a driver financially for damages to their vehicle, the occupants of their vehicle, and other vehicles and passengers in an accident. While there is no consensus on what "full coverage" means, it typically includes liability, collision, and comprehensive insurance.

Liability insurance covers damages or injuries you cause to another vehicle or person, up to a certain limit. It is required by law in every state except New Hampshire. This coverage pays for the damage you cause to others, up to the limits of your policy.

Collision insurance covers damages to your vehicle that result from colliding with another object, such as a vehicle, tree, or guardrail. It covers your vehicle if you are at fault for an accident. Collision coverage is usually purchased with comprehensive insurance and is not often offered on its own.

Comprehensive insurance covers damage to your vehicle that is not due to an accident. This includes damage due to theft, wind, hail, falling objects, or vandalism. It also covers damage caused by hitting an animal. Comprehensive insurance helps to pay for physical damage to the vehicle or to replace it when the damage is not the result of a collision.

While full coverage auto insurance provides protection in most scenarios, it does not cover every possible circumstance. For example, it typically does not cover damage due to street racing, off-road driving, or the use of the vehicle for business purposes. Additionally, full coverage may not include all types of insurance, and some extras may need to be added separately.

Full coverage auto insurance offers more protection than the minimum liability coverage required by most states. It is often required by lenders or leasing agencies and can provide valuable financial protection in the event of an accident or vehicle damage.

Full coverage doesn't cover every situation

While full coverage auto insurance provides comprehensive protection for drivers and their vehicles in most situations, it is important to understand that it does not cover every scenario. Here are some key points to consider:

• No single policy can offer 100% coverage in all situations. Full coverage auto insurance typically combines liability, collision, and comprehensive insurance, but there are still exclusions.
• Full coverage insurance generally protects you financially if you are at fault in an accident, covering damage to your vehicle, occupants of your vehicle, and other vehicles and passengers.
• However, it typically does not cover damage due to street racing, off-road driving, car-sharing programs, catastrophes (such as war), destruction by government or civil authorities, business use, or intentional damage.
• The specific coverages included in your full coverage policy may vary, and it may not include all the types of insurance you expect. For example, it may not cover new car replacement, roadside assistance, uninsured motorist coverage, medical payments coverage, or personal injury protection.
• Full coverage insurance is not required by law, but it is usually mandated by lenders or lease companies if you have an auto loan or lease.
• Even with full coverage, you will still need to pay your deductible if you cause an accident. The deductible is the amount you are expected to pay out of pocket before the insurance company covers the rest.
• To ensure you have the right protection, carefully review your policy, understand your state's minimum insurance requirements, and consider adding additional coverages if needed.

Full coverage is more expensive than basic liability coverage

Full coverage auto insurance is a combination of liability, collision, and comprehensive insurance. It covers damage to your car and injuries or damage you cause to others. While full coverage is not a legal requirement, it is often mandated by lenders or leasing agencies.

The cost of full coverage auto insurance varies depending on factors such as your age, location, driving record, and insurance score. However, it is generally about twice as expensive as liability-only coverage. For example, the national average for full coverage is $1,718 per year, while the average cost of liability-only coverage is $703 per year.

While full coverage is more expensive, it offers greater financial protection. If you cannot afford to repair or replace your car if it is damaged or stolen, full coverage is a good option. Additionally, if you have a new or expensive car, regularly commute in heavy traffic, or live in an area with extreme weather or high car theft rates, full coverage is recommended.

Ultimately, the decision to choose full coverage or basic liability coverage depends on your financial situation and risk tolerance.

Full coverage is not required by law

While full coverage auto insurance is a great option for drivers who want to be prepared for any scenario, it is not a requirement by law. In fact, there is no consensus on what "full coverage" car insurance means, as it is a combination of different types of insurance coverages.

Full coverage auto insurance typically includes liability insurance, which covers damages or injuries caused to another vehicle or person. It also includes collision insurance, which covers damages to your own vehicle after an accident, and comprehensive insurance, which covers damages to your vehicle from circumstances outside your control, such as natural disasters or theft.

Although full coverage is not legally required, most states mandate a minimum amount of liability insurance. This ensures that drivers can financially cover damages or injuries they cause to others in an accident. However, liability insurance does not cover your own injuries or vehicle repairs.

It's important to note that full coverage auto insurance doesn't cover everything. For example, it may not include roadside assistance, new car replacement, or uninsured motorist coverage. Additionally, if you have a loan or lease on your car, your lender will likely require you to have both collision and comprehensive coverage.

In summary, while full coverage auto insurance offers comprehensive protection, it is not a legal requirement. Drivers should review their state's minimum insurance requirements and consider their own needs to determine the appropriate level of coverage.

Full coverage is often required by lenders

When you're financing a car, lenders will typically require you to have full coverage insurance. This is to protect their investment in the vehicle, which acts as their asset. Full coverage includes liability coverage, as well as comprehensive and collision coverage, offering comprehensive protection for both you and the lender.

Lenders and lessors have contracts that require borrowers to purchase and maintain full coverage on the vehicle while they still own it. This is because, when you finance a car, you don't technically own the vehicle or hold the title until the loan is fully paid off. The lender has a lien on the title until the loan balance is zero, and during this time, they can dictate how much insurance you must purchase.

While liability insurance is mandatory in almost all states, comprehensive and collision coverage are usually optional. However, lenders can have their own rules about the coverages they require. For example, some banks require borrowers to carry a policy with a deductible of no higher than $500 to ensure they can afford necessary vehicle repairs after an accident.

If you don't maintain full coverage on a financed car, you may be violating your loan agreement, which could lead to penalties, repossession, or legal action by the lender.

Frequently asked questions