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Full Coverage Auto Insurance Example

Full Coverage Auto Insurance

Summary: How to Get “Full Coverage” Car Insurance

Did you know “full coverage” car insurance doesn’t actually exist? It’s a term often used to refer to the combination of collision and comprehensive.

Full Coverage Auto Insurance

Many think they carry “full coverage” on their car insurance policy; however, in reality there is no such thing as full coverage auto insurance.

A full coverage policy is typically one that includes several types of car insurance coverage that, as a whole, provide a solid level of protection in case of an accident.

What Does “Full Coverage” Mean?

While there is no car insurance coverage that goes by the name “full coverage,” most individuals think of full coverage as a policy that combines the following:

  • State-required liability or no-fault insurance coverage to cover bodily injury and property damages to others in an accident you cause.
  • Collision coverage to pay for damages to your vehicle in the event of an accident.
  • Comprehensive coverage, which is designed to cover vandalism, theft, and other damages that are not the result of an accident.

Even with this, the details and amount of protection will vary by the company issuing the policy. You need to ask about the details and read the fine print carefully.

Additional Coverages to Consider

Having a full coverage auto insurance policy doesn’t mean you have full protection no matter what. Depending on your circumstances, it may even mean you don’t even have good enough protection. Instead of relying on a “full coverage” policy, ask yourself what coverage and limits best meet your needs.

There are numerous other types of car insurance coverage that will offer you additional protection in case of an accident or other unfortunate situation.

Consider adding one or more of the following insurance coverages to your policy if you are looking for a very comprehensive car insurance policy:

  • Uninsured motorist protection – This helps you cover your costs if you get hit by a driver with no insurance.
  • Underinsured motorist protection– This will help pay your costs if the other driver has insufficient insurance coverage and/or coverage limits.
  • Medical payments coverage– You can use this coverage to pay for your medical costs after a car accident, even if you were at fault.
  • Rental reimbursement – If you’re in an accident and your car is in repair, this coverage can cover your rental costs while you wait.
  • Emergency road service – You can use this coverage if your car breaks down on the road and you need towing or labor.
  • Customized parts and equipment – If you’ve enhanced your vehicle with expensive equipment, this coverage will help you with the cost of damages to your custom parts.
  • Gap insurance – If your car is totaled in an accident, this coverage helps pay the balance between the amount you owe on your loan or lease and the car’s estimated actual cash value.

The Right Coverage for You

There are many factors to consider when determining which auto insurance coverage to purchase and which to opt out of. These include:

  • The fair market value of your vehicle.
  • The quality and limits of your health insurance.
    • Medical payments coverage can be used to supplement your health insurance after an accident.
  • Your location.
    • High theft or vandalism rates can merit additional protection.
    • If your city has a high number of uninsured drivers, you may wish to purchases uninsured/underinsured motorist insurance.
  • Your current budget.
    • The best protection is frequently the most insurance you can afford to carry.

Remember that what one person considers “full coverage” may not be the best car insurance for you.

Take a look at your own personal needs, your vehicle, and your budget to determine what will work best for you. Once you have an idea of what car insurance coverages you need, talk to your agent or get a quote online to create a policy that you feel offers comprehensive protection and peace of mind.

Full coverage car insurance rates by state

No insurance policy can cover you and your car in every circumstance. But a ‘full coverage’ policy covers you in most of them.

Insurance is meant to protect you from being sued, or left financially stranded by a totaled car, or ruined by an uninsured driver. That doesn’t mean an accident won’t leave you with expenses and hassles you wouldn’t face otherwise.

Full coverage is shorthand for policies that cover not only your liability but damage to your car as well. Here’s how to weigh liability vs. full coverage.

What is full coverage?

To most drivers, “full coverage” means you have bought not only liability insurance – which is mandatory virtually everywhere and pays for the damage you inflict on other people and property – but comprehensive and collision, too.

Ideally, full coverage means you have insurance in the types and amounts that are appropriate for your income, assets and risk profile. The point of all types of car insurance is to keep you from being financially ruined by an accident or incident.

Of course, you can buy a policy with every conceivable option:

  • The highest available liability limits (usually $250,000 per person bodily injury, $500,000 per accident, $100,000 property damage)
  • The lowest possible deductible on collision and comprehensive coverage. At some companies, it’s $0, but $100 and $250 are common.
  • Uninsured motorist coverage
    • Uninsured/underinsured motorist bodily injury coverage with limits matching your liability coverage
    • Uninsured motorist property damage (not available in all states)
  • All available medical coverages in the highest amounts possible (personal injury protection in no-fault states and medical payments coverage in most others)
  • Rental reimbursement coverage
  • Towing and labor
  • Preferred-customer add-ons such as new car replacement programs or vanishing deductibles

In reality, there is no policy that will cover you and your car in every situation, just most of them.

What does full coverage insurance cover

A typical full coverage policy (liability, comprehensive and collision, uninsured motorist and medical coverage) should cover:

  • The damage you do to others, up to your liability limits.
  • Your car, up to its fair market value, minus your deductible, if you are at fault or the other driver does not have insurance or if it is destroyed by a natural disaster or stolen.
  • Your injuries and those of your passengers, if you are at fault, up to the amount of your medical coverage.
  • Your injuries and yours of your passengers, if you are hit by an uninsured motorist, up to the limits of your uninsured motorist policy.

Typical full coverage insurance won’t pay for:

  • Racing or other speed contests
  • Off-road use
  • Use in a car-sharing program
  • Catastrophes such as war or nuclear contamination
  • Destruction or confiscation by government or civil authorities
  • Using your vehicle for livery or delivery purposes; business use
  • Intentional damage

Typical comprehensive and collision policies won’t cover:

  • Freezing
  • Wear and tear
  • Mechanical breakdown (often an optional coverage)
  • Tire damage
  • Items stolen from the car (those may be covered by your homeowners or renters policy, if you have one)
  • A rental car while your own is being repaired (an optional coverage)
  • Electronics that aren’t permanently attached
  • Custom parts and equipment (some small amount may be specified in the policy, but you can usually add a rider for higher amounts)

Do I need full coverage?

You are required to have liability insurance or some other proof of financial responsibility in every state. Coverage comes in varying levels, from the mandatory minimum to as much as $500,000. You as a car owner are on the hook personally for any injury or property damage beyond the limits you selected. Your insurance company won’t pay more than your limit.

But liability coverage won’t pay to repair or replace your car. If you owe money on your vehicle, your lender will require that you buy collision and comprehensive coverage to protect its investment. After you pay off the loan, the choice to buy comp and collision is yours alone.

We have our own rules of thumb on insuring any car:

  • When the car is new and financed, you have to have full coverage. Keep your deductible manageable.
  • When the car is paid off, raise your deductible to match your available savings.
  • When you reach a point financially where you can replace your car without the assistance of insurance, seriously consider dropping comprehensive and collision.

Use Insurance.com’s online car insurance calculator to get our recommendation of what car insurance coverage you should buy. It’ll also recommend deductible limits or if you need coverage for uninsured motorist coverage, medpay/PIP, and umbrella insurance.

How much does full coverage cost?

Car insurance rates are very specific to the person who owns the car: Your age, driving record, credit history and location count as much as the kind of car you are driving. Rates also vary by hundreds of dollars from company to company. That’s why we always suggest, as your first step to saving money, that you compare quotes.

Here’s a comparison of the average yearly cost of the following coverage levels, by state:

  • State-mandated minimum liability, or, bare-bones coverage needed to legally drive a car
  • Liability coverage of $50,000 for those injured in an accident you cause, up to $300,000 per accident, and $50,000 for property damage you cause
  • Full coverage liability of $100,000 per person injured in an accident you cause, up to $300,000 per accident, and $100,000 for property damage you cause, with a $1,000 deductible for comprehensive and collision
  • Full coverage iability of $100,000 per person injured in an accident you cause, up to $300,000 per accident, and $100,000 for property damage you cause, with a $500 deductible for comprehensive and collision
  • Full coverage liability of $100,000 per person in an accident you cause, up to $300,000 per accident, and $100,000 for property damage you cause, with a $250 deductible for comprehensive and collision

What is covered by a basic auto insurance policy?

Understand the coverage for your car

Auto Insurance

IN THIS ARTICLE

While different states have different mandates for auto insurance, most basic car policies consist of six types of coverage. Here’s what you need to know about each.

While different states mandate different types of insurance and there are several additional options (such as gap insurance) available, most basic auto policies consist of: bodily injury liability, personal injury protection, property damage liability, collision, comprehensive and uninsured/underinsured motorist.

Note that each type of coverage is priced separately, so there is variability in policy limits and pricing.

Bodily injury liability coverage applies to injuries that you, the designated driver or policyholder, cause to someone else. You and family members listed on the policy are also covered when driving someone else’s car with their permission.

It’s very important to have enough liability insurance, because if you are involved in a serious accident, you may be sued for a large sum of money. It’s recommended that policyholders buy more than the state-required minimum liability insurance, enough to protect assets such as your home and savings.

This coverage pays for the treatment of injuries to the driver and passengers of the policyholder’s car. At its broadest, PIP can cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in an auto accident. It may also cover funeral costs.

This coverage pays for damage you (or someone driving the car with your permission) may cause to someone else’s property. Usually, this means damage to someone else’s car, but it also includes damage to lamp posts, telephone poles, fences, buildings or other structures your car hit.

Collision coverage pays for damage to your car resulting from a collision with another car, an object, such as a tree or telephone pole, or as a result of flipping over (note that collisions with deer are covered under comprehensive). It also covers damage caused by potholes.

Collision coverage is generally sold with a separate deductible. Even if you are at fault for the accident, your collision coverage will reimburse you for the costs of repairing your car, minus the deductible. If you’re not at fault, your insurance company may try to recover the amount they paid you from the other driver’s insurance company and, if they are successful, you’ll also be reimbursed for the deductible.

This coverage reimburses you for loss due to theft or damage caused by something other than a collision with another car or object. Comprehensive covers events such as fire, falling objects, missiles, explosion, earthquake, windstorm, hail, flood, vandalism, riot, or contact with animals such as birds or deer. It will also pay to repair your windshield if it is cracked or shattered.

Comprehensive insurance is usually sold with a separate deductible, although some insurers may offer the glass portion of the coverage without a deductible.

Underinsured motorist coverage reimburses you, a member of your family, or a designated driver if one of you is hit by an uninsured driver or a driver who doesn’t have sufficient insurance to pay for your total loss. This coverage also offers protection in the event a covered driver is the victim of a hit-and-run or if, as a pedestrian, you are struck by an uninsured or underinsured motorist.

Next steps: Shopping for auto insurance? Here’s how to find the right policy for you and your car.

Online Auto Insurance

What does an auto insurance policy look like?

Explanation of the auto insurance policy declarations page: (Click on each description for more information)

Company Name – This is the name of the auto insurance company which entered the insuring agreement or the “policy”. Be sure to understand the difference within a brokerage and companies. It is against laws to use the term “insurance company” in a business name unless it is one so if you’re buying a policy through a business using the words, services, marketing, or agency, it probably is acting on behalf of another company who’s actually entering the agreement.

Policy Number – This number is unique to each policy and helps identify it from the others. Policy numbers can consist of a variation of numbers and letters. The letters are usually in a prefix and are an abbreviation of a company or program. This number changes each term to identify new terms.

Policy Period and Term – This would indicate the effective and expiration dates and times of the current term as well as the length of the term, usually one (month-to-month), three (quarterly), six (semi-annual), twelve (annual) month terms. This does not specify the issue date (original effective date and time of this policy). For original issue date, you would need to request a “letter of experience” from the carrier or general agency.

Insured Information – This is the name and mailing address of the “named insured”, “primary insured” or “policy holder” (all mean the same thing) which is the person who applied and signed for the policy. If there are multiple drivers included, they may not appear in the insured info section; instead, they most likely would appear next to the vehicles. The above example does not list any additional drivers. Another section not in the above example is the “excluded driver” section which are those who are definitely not covered.

Vehicle Description – This would list all the vehicles included in the policy along with details such as the year, make, model, sub-model and VIN number. A “vehicle symbol” may be included in this section which is a number assigned to vehicles to indicate a “risk factor”. Usually, the higher the symbol, the more premium it may generate. Sometimes if the vehicles do not fit in one page, they print an additional one or may even limit 4-5 vehicles per policy issued.

Garaging Address – Not to be confused with the mailing address which indicates where the correspondence will be mailed, the garaging address indicates where a vehicle is garaged when not being driven. Where an auto is parked may affect the rates. If it has been determined that a certain area has a higher probability of loss, premiums most likely be increased for those residing there.

Coverage and Premium – This is an important part to understand because it indicates what coverage is included and the limits issued. Learn more about coverage to avoid any misunderstandings or assumptions which may lead to the undesirable. The above example shows coverage in dollar amounts; however, many policies will have abbreviated in thousands the limits included. The premium is what you paid for it during the term. If you compare rates, be sure to note the terms so that you complete a proper comparison.

Endorsements – This section would specify if there are any additional attachments to the policy. Common endorsements are “glass breakage” or “exclusions” as well as any other coverage or condition which would not come automatically. Endorsements can include coverage, restrictions, and other things such as special conditions.

Loss Payee – This would list anyone who has a lien on the ownership of the vehicle. The loss payee is one with rights to payment in the event of total loss. It may include a finance company or even someone who owns part of the car. This sections sometimes show additional insured which indicate someone who would have a degree of protection on the event of a loss.

Signature – The signatures of a company’s representative(s) acknowledge the conditions of the insuring agreement along with the coverage limitations. The insured signs their signature at the time of the policy purchase. Electronic signatures may also be used in some states for the applications.

Full Coverage Auto Insurance

Summary: How to Get “Full Coverage” Car Insurance

Did you know “full coverage” car insurance doesn’t actually exist? It’s a term often used to refer to the combination of collision and comprehensive.

Full Coverage Auto Insurance

Many think they carry “full coverage” on their car insurance policy; however, in reality there is no such thing as full coverage auto insurance.

A full coverage policy is typically one that includes several types of car insurance coverage that, as a whole, provide a solid level of protection in case of an accident.

What Does “Full Coverage” Mean?

While there is no car insurance coverage that goes by the name “full coverage,” most individuals think of full coverage as a policy that combines the following:

  • State-required liability or no-fault insurance coverage to cover bodily injury and property damages to others in an accident you cause.
  • Collision coverage to pay for damages to your vehicle in the event of an accident.
  • Comprehensive coverage, which is designed to cover vandalism, theft, and other damages that are not the result of an accident.

Even with this, the details and amount of protection will vary by the company issuing the policy. You need to ask about the details and read the fine print carefully.

DMV.org Insurance Finder

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Additional Coverages to Consider

Having a full coverage auto insurance policy doesn’t mean you have full protection no matter what. Depending on your circumstances, it may even mean you don’t even have good enough protection. Instead of relying on a “full coverage” policy, ask yourself what coverage and limits best meet your needs.

There are numerous other types of car insurance coverage that will offer you additional protection in case of an accident or other unfortunate situation.

Consider adding one or more of the following insurance coverages to your policy if you are looking for a very comprehensive car insurance policy:

  • Uninsured motorist protection – This helps you cover your costs if you get hit by a driver with no insurance.
  • Underinsured motorist protection– This will help pay your costs if the other driver has insufficient insurance coverage and/or coverage limits.
  • Medical payments coverage– You can use this coverage to pay for your medical costs after a car accident, even if you were at fault.
  • Rental reimbursement – If you’re in an accident and your car is in repair, this coverage can cover your rental costs while you wait.
  • Emergency road service – You can use this coverage if your car breaks down on the road and you need towing or labor.
  • Customized parts and equipment – If you’ve enhanced your vehicle with expensive equipment, this coverage will help you with the cost of damages to your custom parts.
  • Gap insurance – If your car is totaled in an accident, this coverage helps pay the balance between the amount you owe on your loan or lease and the car’s estimated actual cash value.

The Right Coverage for You

There are many factors to consider when determining which auto insurance coverage to purchase and which to opt out of. These include:

  • The fair market value of your vehicle.
  • The quality and limits of your health insurance.
    • Medical payments coverage can be used to supplement your health insurance after an accident.
  • Your location.
    • High theft or vandalism rates can merit additional protection.
    • If your city has a high number of uninsured drivers, you may wish to purchases uninsured/underinsured motorist insurance.
  • Your current budget.
    • The best protection is frequently the most insurance you can afford to carry.

Remember that what one person considers “full coverage” may not be the best car insurance for you.

Take a look at your own personal needs, your vehicle, and your budget to determine what will work best for you. Once you have an idea of what car insurance coverages you need, talk to your agent or get a quote online to create a policy that you feel offers comprehensive protection and peace of mind.

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