Full Coverage Auto Insurance: Worth The Cost?

Full coverage auto insurance is a combination of liability, collision, and comprehensive insurance. It is not a legal requirement to have full coverage, but it is a good idea if you want to protect yourself from the financial burden of repairing or replacing your car after an accident. While it doesn't cover everything, full coverage will protect you in most scenarios. The cost of full coverage varies depending on factors such as age, location, driving record, and insurance provider, but it is generally more expensive than basic liability insurance.

Comprehensive coverage

The cost of comprehensive coverage will depend on factors such as your age, location, driving record, and insurance score, among others. The coverage limit is the maximum dollar amount that an insurance company will pay for a covered claim, after which the insured is responsible for paying the remaining cost.

Collision coverage

However, collision coverage becomes less valuable over time as it will never pay out more than the car is worth. If you have an older car, collision coverage may not be worth the cost, as it will only pay out up to the current market value of your car, minus your collision deductible.

When deciding whether to opt for collision coverage, consider the value of your vehicle and subtract your deductible. That amount is the most value you can expect to get from a collision insurance policy. Compare this against your collision insurance premium to determine if collision insurance is worth it for you.

Liability coverage

Property damage liability coverage insures against damage to another person's property caused by your vehicle. This includes repairs to the other driver's vehicle, the cost of a rental vehicle while the other person's car is being repaired, damage to buildings or fences, and damage to personal property inside the vehicle. Additionally, liability coverage can help with legal fees if you're sued for property damage.

Bodily injury liability coverage, on the other hand, provides payment for injuries sustained by another person in an accident. This includes legal fees if you're sued for causing injuries to another person. It is important to note that states may have different requirements regarding who can file a bodily injury claim.

It is worth noting that liability coverage does not cover damages to your property or your own injuries; separate coverages, such as personal injury protection and uninsured/underinsured motorist coverages, are needed for that.

Uninsured motorist coverage

Uninsured and underinsured motorist coverage can include:

• Uninsured motorist bodily injury coverage (UMBI), which pays medical bills for you and your passengers.
• Uninsured motorist property damage coverage (UMPD), which covers damage to your vehicle.
• Underinsured motorist bodily injury coverage (UIMBI), which covers medical bills for you and your passengers if the at-fault driver's insurance is insufficient.
• Underinsured motorist property damage coverage (UIMPD), which covers damage to your vehicle if the at-fault driver's insurance is insufficient.

It's important to note that uninsured motorist coverage typically does not include a deductible, while underinsured motorist coverage may require a deductible in some states. Additionally, uninsured motorist coverage for property damage (UMPD) may not cover hit-and-run incidents in certain states, so collision coverage may be necessary to ensure complete protection.

In summary, uninsured motorist coverage is a valuable addition to full-coverage auto insurance. It provides financial protection and peace of mind in the event of an accident with an uninsured or underinsured driver, helping to cover medical and property damage expenses that could otherwise be costly and burdensome.

Personal injury protection

In addition to medical costs, PIP can also cover funeral expenses and lost income for your surviving dependents in the unfortunate event of your death in an auto accident. Furthermore, PIP can help pay for services you would typically perform, such as childcare and housecleaning, if you are unable to do so due to your injuries.

While PIP is not mandatory in all states, it is required in states with no-fault insurance laws. These states include Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah. In other states, PIP coverage may be optional or not offered at all.

It is important to note that PIP does not cover everything. For example, it will not cover the injuries of other drivers in a collision or any injuries sustained while committing a crime or receiving payment for driving. To ensure full protection, it is recommended to combine PIP with other types of coverage, such as bodily injury liability insurance and property damage liability insurance.

The cost of PIP insurance varies depending on factors such as your location, the amount of coverage you choose, and your driving history. It is generally recommended to compare quotes from multiple insurers to find the best rate for the coverage you need.

Frequently asked questions