Full Auto Coverage: What's Included?

Full coverage car insurance is a general term used by agents, lenders, and dealerships to refer to a policy that includes certain coverages. It's not an actual type of coverage but a way to describe a collection of coverages that protect policyholders in various circumstances. While there's no consensus on what full coverage means, it typically includes liability, comprehensive, and collision insurance, plus any other coverages required by your state. To find out if you have full coverage, check your policy documents for comprehensive and collision coverage, as well as your state's minimum required insurance.

Comprehensive coverage

For example, if your car is damaged in a hailstorm, comprehensive coverage will cover the cost of repairs, minus your deductible. On the other hand, if you swerve to avoid a deer and hit a tree, this would be considered a collision with an object, and comprehensive coverage would not apply.

To determine if you have comprehensive coverage, review your insurance policy documents and look for specific coverage types. Comprehensive coverage is typically listed separately from other types of coverage, such as liability, collision, or uninsured motorist coverage.

Collision coverage

When deciding whether to take out collision coverage, consider the value of your vehicle and whether you would be able to afford to repair or replace it if it were damaged or written off. If your vehicle is new or valuable, or if you would struggle to cover the cost of repairs or a replacement, then collision coverage is a sensible option. However, if your vehicle is in storage and won't be driven for a long period, you may decide that collision coverage is unnecessary.

Liability coverage

Bodily injury liability, on the other hand, provides compensation for the injuries sustained by individuals in the other vehicle or pedestrians due to the accident. This coverage includes medical expenses, rehabilitation costs, and, in some cases, legal fees if you are sued for causing injuries. It is important to note that liability coverage does not extend to damage to your property or injuries you sustain.

The cost of liability insurance depends on various factors, including the amount of coverage you select. Higher coverage limits typically result in higher costs. The coverage limits are usually expressed as three numbers, such as 25/50/10, representing the maximum coverage for bodily injury per person, bodily injury per accident, and property damage per accident, respectively. For example, a limit of 25/50/10 translates to $25,000 for bodily injury per person, $50,000 for bodily injury per accident, and $10,000 for property damage per accident.

It is essential to customize your liability coverage to fit your specific needs. While most states mandate liability insurance, the required limits vary, so it is important to check the requirements in your state. Understanding liability coverage limits is crucial for safeguarding your financial security and ensuring you have adequate protection in the event of an accident.

Uninsured/underinsured motorist coverage

Uninsured motorist coverage, often referred to as "UM coverage," safeguards you in the unfortunate event that you are involved in an accident with a driver who does not have any auto insurance. This type of coverage is designed to protect you from the financial burden of medical bills, vehicle repairs, and other associated costs that can arise from such incidents. It is worth noting that nearly 13% of drivers countrywide are uninsured, and this number climbs above 20% in certain states. Without UM coverage, you could be left paying out of pocket for these expenses.

Underinsured motorist coverage, typically offered alongside UM coverage, provides protection when you are in an accident with a driver whose insurance coverage is insufficient to pay for the damages or injuries they have caused. This coverage ensures that you are not left bearing the financial burden when the at-fault driver's policy limits are too low. Underinsured motorist coverage is particularly relevant, as it is not uncommon for at-fault drivers to have low policy limits that may not adequately cover the costs of the damages or injuries they inflict.

In many states, uninsured and underinsured motorist coverage is mandatory, and even in states where it is not required, it is highly recommended for all drivers. This is because it offers crucial financial protection in the event of an accident with an uninsured or underinsured driver. Without this coverage, you could be responsible for covering your own medical bills and vehicle repairs, even if you were not at fault for the accident.

It is important to note that the specifics of uninsured/underinsured motorist coverage can vary from state to state, and some states may require a deductible for UMPD/UIMPD. Additionally, you may have the option to choose the insurance limits of your coverage, allowing you to select a limit that aligns with the value of your vehicle.

Medical payments coverage

Limits for MedPay typically range from $1,000 to $10,000, depending on the state and insurer. It's a good idea to carry coverage equal to your health insurance deductible so that you can use MedPay to cover any out-of-pocket medical expenses. If you don't have health insurance, consider carrying a higher MedPay limit to cover potential medical bills after an accident.

While MedPay is not offered in every state, it is available in most. States that don't offer MedPay typically have personal injury protection (PIP) coverage available instead. PIP is required in some states and covers similar expenses to MedPay, but it also covers lost wages resulting from a car accident.

Frequently asked questions