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What is full coverage auto insurance?

Daniel Walker
Licensed Insurance Agent for 15 Years

UPDATED: Mar 19, 2020

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Here's what you need to know...
  • Full coverage auto insurance includes liability, comprehensive, and collision
  • You can choose optional add-ons that aren’t automatically included in full coverage, such as uninsured motorist, car rental reimbursement, roadside assistance, gap insurance, and more
  • Full coverage can be very expensive depending on the insurance company, but it will cover several different expenses resulting from a car accident

Full coverage is a broad term that you might hear people talk about when discussing their vehicle, but what does it mean? There are so many auto insurance options for your policy that it can get slightly confusing when trying to figure out whether or not you’re fully protected when driving.

Though the items included with full coverage varies by insurance company, what they all have in common is that they provide coverage for almost any expense that could arise from an auto accident. This coverage will provide peace of mind as well as protect yourself and other drivers.

It’s true that full coverage will be costly compared to more basic insurance policies. However, there’s a excellent chance that it will pay off in the long-run. This guide will fill you in on what is covered when you are fully insured, and why it may be a good idea to have.

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What is full coverage auto insurance?

AdobeStock_40672072-1600x1600In a nutshell, full coverage auto insurance means coverage for damages to your vehicle whether it collides with another car, or if an object hits your car when parked. Full coverage also takes care of property damage and bodily injury, depending on the amount in your policy.

There are many optional items that people often assume are included with full coverage, such as uninsured motorist insurance or rental car coverage.

The main coverage options normally included with full coverage are liability and a combination of comprehensive and collision coverage. If you aren’t familiar with these insurance terms, the guide below will help you out.

What’s Included Under Full Coverage

Liability

Most states require that drivers always have auto insurance. The exact requirements vary by state. Liability insurance includes bodily injury amounts for one or two people.

It also covers up to a certain amount of property damage. The dollar limit on your policy will tell you how much the insurance company will cover per accident claim.

For example, your policy may show you have $15,000 /$30,000 /$5,000. The policy will cover up to $15,000 for bodily injury for one person, $30,000 for bodily injury for two or more people, and $5,000 for property damage.

Again, these amounts are the limits per claim. The amount doesn’t decrease after using your insurance to cover the cost of an accident.

Some states require PIP (Personal Injury Protection) along with liability. PIP won’t normally be included with full coverage unless it is a requirement in your state.

The same goes for uninsured motorist coverage, which isn’t always included with full coverage, but in some cases, it will need to be added if it’s a requirement in your state. Again, be sure to know what your state’s auto insurance requirements are.

Comprehensive

Coverage for comprehensive claims – claims involving damage to your vehicle other than collision – are always part of full coverage. It can usually cover any cost for repairs to your car that occurred while you were not driving.

For example, if a tree falls on your car while it was parked out on the street, comprehensive coverage will take care of that.

It will also take care of damage related to vehicle break-ins, vandalism, and theft, and any significant harm to your car while nobody is driving it is covered.

Damage from natural causes (e.g. wind knocking a branch onto your hood), impact from a bicycle or vehicle while yours is parked, or even damage from a flying golf ball. The list of coverage can go on and on.

Collision

Collision coverage takes care of damage to your vehicle while you or another person is driving the car. For example, when you hit a tree while driving, collision coverage would take care of it.

Collision and comprehensive often come packaged together depending on the insurance company. Both often include a deductible amount that you choose, generally $250, $500, or $1000 per claim.

Collision coverage is not required by state law, nor is comprehensive. However, if the vehicle was financed and not yet paid in full, the lender usually always requires that the car is fully covered with both types of coverage. Either way, it’s a good idea to have full coverage because it could save you more money in the long run.

Auto Insurance Add-Ons

AdobeStock_10712043-1600x1600– Rental Reimbursement

This is an option to add to your policy in case of an accident to your vehicle. It will entitle you to a rental car while your car is being repaired.

In some cases, the insurance company can pay for the rental directly with a per-day limit. In most cases, the insurance company will reimburse you for some or all of the rental fees once your own vehicle is fully repaired.

Uninsured Motorist Protection

As mentioned above, is an optional add-on unless it is required by your state. If you are involved in an accident with an uninsured driver, there are a lot of expenses that need to be covered.

Since the other driver doesn’t have insurance to cover it, your insurance policy won’t be able to cover those costs unless you have uninsured motorist coverage in your policy.

The costs covered include medical expenses, lost wages resulting from the accident, and compensation for pain and suffering. This coverage will cover expenses for all those in the vehicle at the time of the accident.

Roadside Assistance

Many believe that roadside assistance is part of being fully insured, but it is not usually included unless you choose to add it on. It is helpful if your vehicle breaks down on the side of the road, if you lock your keys in the car and are left stranded, or if you happen to run out of gas. It can also cover the cost of the tow and wages for the person who assists you.

As you search for the best deals on auto insurance, it’s good to understand what you are choosing. Be sure to use this guide as a reference when comparing insurance policy options, especially if you need or want you and your family to be fully insured and protected.

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