When agents, lenders, and insurers describe full coverage auto insurance, they’re typically referring to carrying both liability and physical damage coverages (comprehensive and collision). However, there’s no consensus on what “full coverage car insurance” means. Don’t be fooled — no insurer can sell a policy where you’re 100% covered in all situations.
So what does “full coverage” car insurance actually mean?
When financing or leasing a vehicle, your lender may use the term “full coverage.” That means they require you to carry comprehensive and collision plus anything else your state mandates. Liability is a mandatory coverage in nearly every state, while comprehensive and collision (physical damage coverages) are optional. However, lenders can have their own rules about the coverages they require.
Instead of asking, “Is my car insurance full coverage?” ask your insurance company or agent if you have the right coverages. Paying for every protection offered by your insurance company could get expensive. While your lender may consider the state-minimum liability as sufficient, that may not be enough coverage to protect you and the other drivers on your policy. You might consider customizing coverages for you, your family, and your vehicle.
Do I need full coverage car insurance?
Even if your lender doesn’t require any coverage, a new vehicle is an important investment and should be protected. Comprehensive and collision will pay for damages to your vehicle due to accidents and incidents in and out of your control. If your vehicle’s value is minimal, carrying physical damage coverage may not make sense. Should you decide to select liability coverage only, make sure you’ll be able to purchase a new vehicle entirely out of your pocket in the event it’s totaled and uninsured.
Extra coverages like roadside assistance or rental car reimbursement are typically inexpensive and can be purchased at your discretion as well.
Example: You cause an accident that totals your car, valued at $15,000. Your liability coverage pays for the damage to the other driver’s car, while your collision coverage pays out $15,000 (minus your deductible) to help replace your car. Without collision coverage, you’d have to pay for a new vehicle entirely out of pocket.
How do I know if I have full coverage?
You can typically find a full list of the coverages you have by logging in to your policy using your insurer’s mobile app or online account portal and viewing your vehicle’s coverage details. The overview section of your policy’s declarations page may also list all of your coverages. If you see both collision coverage and comprehensive coverage (sometimes referred as “other than collision” coverage) listed under your vehicle, then you’re covered for physical damage.
How much is full coverage insurance?
Adding physical damage protection and other optional coverages will cost more than a liability-only policy. How much more depends on many factors, including the year, make, and model of the vehicle you want to protect, plus the car insurance deductible you select — the cost of comprehensive and collision coverage will decrease if you choose a higher deductible.
In the end, “full coverage” car insurance is less about having every possible protection and more about ensuring your policy includes the coverages that make sense for your vehicle, your financial situation, and your peace of mind. While the term often refers to a combination of liability, comprehensive, and collision coverages, it’s not a one-size-fits-all solution. Review your policy carefully, consider your lender’s requirements, and talk to us to make sure you’re truly protected where it matters most.
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Source: www.progressive.com/answers/full-coverage-car-insurance/