Customers looking to purchase auto insurance frequently encounter the phrase “full coverage auto insurance.” It typically refers to a package deal that includes not only liability insurance but also collision insurance, comprehensive insurance, and any other types of coverage that a car owner could need. It is up to you to establish the level of coverage that you require, as the combination of plans and coverage that your insurance carrier offers will differ from one state to the next, regardless of where you live.
A car might have numerous types of insurance coverage, which are referred to collectively as “full coverage” in the context of auto insurance. It is typically sold as a package deal that includes all three types of insurance: liability, collision, and comprehensive. It is also possible for it to include additional features that you might want or require. Once you’ve met the requirements set by your state, it’s up to you to choose the type and level of insurance coverage that fits your needs best.
To have full coverage means that you believe you are able to shoulder any financial burden that may result from damage to your vehicle or to the vehicles of others. Find out more about your choices so you can make an informed decision about what kind of coverage is appropriate for you.
The Meaning of Full Coverage Insurance, Along with Some Examples
When you have full coverage, you typically have all of the coverage that is needed by your state or that meets your needs. There is no such thing as a “full coverage” auto insurance policy that will pay for anything that could go wrong with or to your vehicle. Be aware of any broker that makes contradictory statements.
Your responsibility to the other motorist or passengers in the event of an injury or damage to property is covered by your liability. It is mandatory in the vast majority of states.
Your collision insurance will pay for any damage to your car that happens when it hits something else.
When you have comprehensive coverage on your vehicle, the insurance company will pay for damage that is not the result of an accident.
In the United States, each state has the ability to determine its own criteria. Commonly included in this category are bodily injury liability and property damage responsibility. Uninsured and underinsured drivers are subject to mandatory insurance requirements in some states. There are some who demand that you have medical payment coverage.
If you are getting a loan to pay for your car, your lender may only require you to meet the state’s minimum requirements, or they may also want you to have collision and comprehensive coverage.
You should be able to find the rules about auto insurance in your state on the website for your state’s insurance department.
How does insurance with full coverage work?
Because the coverage you get depends on the insurance you choose, it’s a good idea to ask your provider if there are any other options.
Payment for Medical Expenses and Insurance for Personal Injury:
The level of coverage for medical payments and personal injury protection that is offered is determined by the laws of the state. They contribute to the expense of medical care for you and any other passengers in the vehicle with you. It’s possible that it will cover lost wages and other costs caused by the injuries.
Coverage for Motorists Who Are Either Uninsured Or Underinsured
Coverage is required by some jurisdictions to protect you in the event that you are involved in an accident with another driver who is either uninsured or underinsured or if the other driver flees the scene of the accident. It’s possible that even if they have health insurance, it won’t be enough to cover all of their medical bills. Check with your state’s government to find out what requirements it has.
Insurance for Collisions
If you are at fault in an accident and your vehicle strikes another vehicle or an object, such as a fence, your collision coverage will reimburse you for the cost of repairing or replacing your vehicle. It does not pay for damage to the vehicle of the other person.
You will be able to customize both the maximum amount of coverage you have and the deductible that you are required to meet. Your premium may change as a result of these numbers. If you purchased your vehicle with a loan, the lender may require that you have this coverage. If nothing else, it is frequently a choice.
Insurance That Covers Everything
Damage to your vehicle that was not the result of an accident is covered by comprehensive insurance. This would cover unfortunate occurrences such as a fire, theft, damage caused by a storm or animal, fallen objects, or animal damage. Your vehicle may sustain damage that is beyond your control, but comprehensive insurance can help pay for it.
Additional auto insurance
It’s possible that you believe that complete coverage automatically includes towing and rental car reimbursement, but that’s not always the case. Be sure to talk over your choices with your representative so that you won’t be taken aback by anything unexpected. It’s possible that you can tack on a few extra choices to your plan at almost no extra expense.
Gap Insurance
There are a few other names for gap insurance, including “debt payment” and “lease payoff” insurance. If you intend to borrow a significant amount of money against the value of your vehicle, you need to make this inquiry. If you have an accident or your automobile is stolen while you still owe more on your loan than it is worth, you will be responsible for paying the difference out of your own pocket, which is referred to as the “gap.” Because the value of cars drops so rapidly, purchasing one now can be a good investment.
Towing and Assistance on the Side of the Road
Roadside assistance is frequently included in all-inclusive coverage packages. Towing and other roadside assistance services, such as changing a flat tire or starting a dead battery, are frequently included.
Insurance for Rental Cars
When you get full coverage from certain insurers, you may qualify for a limited refund of your automobile rental costs. You should ask about the coverage that comes with your insurance because it isn’t always clear.
Usually, you can choose a certain amount of rental coverage every day. Make sure the amount you choose is enough to cover a car that meets your needs.
OEM Endorsement
Repairs using components procured directly from a vehicle’s maker, commonly referred to as the “original equipment manufacturer” (OEM), are not authorized by insurers (OEM). It’s possible that the repairs will require cheaper or used parts instead. But some insurance companies will give you a rider that lets you get OEM parts if you specifically ask for it.
Full Glass Coverage
Damage caused by the glass is covered by comprehensive insurance. When you select full coverage, you immediately have protection against that risk. Choosing a high deductible, on the other hand, could result in the cancellation of your glass coverage because you would be responsible for paying more than the cost of the glass itself. To receive full glass coverage without a deductible requires you to pay a higher premium, but, in some cases, you will have a lower deductible that applies just to glass claims.
Disappearing Tax Deductions
It is unusual for an insurer to offer a deductible that gradually decreases in amount. This policy will award you with a lower premium every year that you maintain a clean driving record. It is typically not included as standard with a policy that provides complete coverage; rather, it is typically available for an additional cost and must be added before a loss takes place.
Should I Get Complete Coverage?
Certain types of coverage are mandated either by law or by the lending institution. If they are not required, then it is up to you to decide whether or not you want to have them.
If you do not have enough money saved to cover the losses caused by an accident, it may be prudent to protect yourself against a major liability in the event that an accident occurs. You should get insurance that covers the majority of potential problems and gives you a manageable deductible in the event that they arise. However, keep in mind that the premiums for such coverage would be far more than average.
You might choose less coverage or a higher deductible if you have saved up a lot of money and can pay for a big chunk of the cost of an accident yourself. However, medical expenses resulting from an accident can be much more expensive than the cost of purchasing a new vehicle, so it is important to keep this in mind. Your broker can talk you through the possible outcomes and help you decide what to do.
Key Takeaways
- There is no one way to explain full coverage auto insurance that covers all of its parts
- You are in charge of deciding which coverage options to include in your policy. You should take into account the rules of your state, the rules of your lender, and your current financial situation.
- Your car insurance premium will go up depending on how much comprehensive coverage you buy.
- You can get assistance from your agent in making decisions on possible courses of action that will reduce your anxiety.
