Full-Service Auto Insurance: What's Covered And What's Not

Full-service auto insurance, also known as 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 means that full coverage insurance pays for repairs to your car and medical bills if you cause an accident that injures others. It's important to note that no insurer can sell a policy that covers you 100% in all situations.

Liability insurance

The amount of liability coverage you need depends on your state's minimum requirements. However, it is generally recommended to purchase more than the state minimum to ensure adequate protection. The cost of liability insurance varies depending on factors such as your age, driving history, and location.

Liability-only insurance is the cheapest option, but it does not cover damages to your own vehicle. If you want coverage for your own vehicle, you will need to add comprehensive and collision insurance to your policy, which is known as full coverage insurance.

Collision insurance

It's important to note that collision insurance does not cover damage to another person's car, nor does it cover repairs to an object you crash into. It also does not cover damage to your car related to weather events, such as hail or flood damage. For coverage of these events, you would need comprehensive insurance.

When purchasing collision insurance, you will be able to choose your deductible amount, which is the portion you pay out-of-pocket before the insurance coverage kicks in. Deductible amounts can range from $100 to $1,000 or more, and choosing a higher deductible can help lower your insurance premiums.

Comprehensive insurance

Comprehensive auto insurance is one component of a full-coverage auto insurance policy, which also includes collision coverage and liability insurance. While the term "full coverage" may be misleading as no single policy delivers 100% coverage, it generally refers to having both comprehensive and collision coverage in addition to any state-mandated coverages.

Uninsured motorist coverage

In the unfortunate event of an accident with an uninsured motorist, uninsured motorist coverage will step in to cover the expenses. This includes medical bills for both the policyholder and their passengers, as well as damage to the policyholder's vehicle. This coverage is especially important considering the significant number of uninsured drivers on the road. According to the Insurance Information Institute, nearly 13% of drivers countrywide do not have auto insurance, and in some states, this number exceeds 20%.

Underinsured motorist coverage is usually offered alongside uninsured motorist coverage. This type of coverage protects the policyholder if they are hit by a driver whose insurance coverage is insufficient to pay for the damages or injuries caused. In such cases, underinsured motorist coverage can help cover the additional costs.

Uninsured and underinsured motorist coverage are mandatory in many states and highly recommended for all drivers. Even in states where it is not required, it is a serious risk to drive without this protection. Without it, individuals may find themselves responsible for covering medical bills and vehicle repairs out of their own pocket.

The specific details of uninsured and underinsured motorist coverage can vary by state. In some states, uninsured motorist bodily injury (UMBI) and uninsured motorist property damage (UMPD) are separate coverages, while in others, they may be combined or consist of up to four distinct coverages. It is important for individuals to understand the requirements and options available in their state to ensure they have adequate protection.

In addition to covering accidents with uninsured or underinsured drivers, uninsured motorist coverage also typically includes hit-and-run incidents. However, it is important to note that in some states, UMPD will not cover hit-and-run accidents, and collision coverage may be necessary to ensure complete protection.

Medical payments

MedPay coverage follows the policyholder, so you're covered even if you're not in your own car. It also covers you across the US and if you're a pedestrian. However, it won't cover injuries sustained while on the job, as workers' compensation would apply in that case.

MedPay is available in most states, but not all. It's also worth noting that MedPay won't cover lost wages due to injuries forcing you to miss work. That's where personal injury protection (PIP) comes in—it covers lost wages, as well as health costs, psychiatric care, and rehabilitative care. PIP is mandatory in no-fault states and optional in others.

The cost of MedPay varies depending on the desired level of coverage. It typically ranges from $2 to $37 per month, with higher coverage limits costing more.

Frequently asked questions