Protecting your car with full-coverage auto insurance sounds like a good idea. But what is full coverage car insurance, and how do you sign up for it? Or, maybe the better question is – do you need full coverage car insurance?
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What is Full Coverage Car Insurance?
If you want to ensure your vehicle has all the necessary insurance, you might think full-coverage car insurance is the way to go. Unfortunately, there isn’t a full-coverage plan.
Auto insurance is sold ala carte or in different packages, which is better for you. This approach lets you customize your coverage to your needs. And getting only what you need means you’re not paying for extras.
Typically, when people say full coverage, they’re referring to a handful of different policy types that offer a well-rounded coverage for your vehicle, you, other passengers, and other vehicles and passengers on the road.
It gets complicated by figuring out what car insurance might be required where you live, what insurance you need, and what add-ons might benefit you. Looking at what people consider full coverage can help you get started and give you the basics as a starting point.
What Does Full Coverage Car Insurance Cover?
The following types of coverage are an excellent place to start when creating your complete coverage package.
Collision Coverage
Collision coverage helps pay for repairs or replace your vehicle if it’s damaged in an accident with another vehicle or an object, like a tree or a mailbox. It also covers your vehicle if you’re in a single-car rollover where you don’t hit anything, but your vehicle is damaged.
Comprehensive coverage
Insurance providers design comprehensive insurance coverage to pay if damage occurs to your vehicle by something other than another vehicle. Common comprehensive claims involve vandalism, windshield damage, accidents with animals, storm damage, and other acts of nature.
Bodily Injury Liability
Bodily injury liability is there to cover other people’s medical expenses (not you) when they sustain an injury in an accident you caused. It also pays for your legal defense if a damage lawsuit occurs.
Property Damage Liability
Property damage liability is similar to bodily injury liability, except it pays for the damage you cause to property (not people) in an accident. It does not typically cover any damage to your vehicle, just the property of others.
Uninsured Motorist Bodily Injury Liability
Uninsured motorist bodily injury liability is there to pay your medical bills and pain and suffering if you’re in an accident with an uninsured driver. It will also step in if there is a hit-and-run and you’re injured. You do not need to be in a vehicle for this coverage to work, so if you’re walking and hit by an uninsured driver, this insurance pays your medical bills.
Uninsured Motorist Property Damage Coverage
Uninsured motorist property damage insurance protects your vehicle and other property if it’s hit and damaged by a driver who does not have insurance. This coverage can also step in if there’s a hit-and-run and your vehicle or property is damaged.
What Does Full Coverage Car Insurance Cost?
Most policies that attempt to provide a full coverage package include collision, comprehensive, and liability insurance. In some states, additional legal requirements for insurance will need to be added to your coverage to ensure full protection. That means that the price of your customized full coverage insurance will vary, but here’s a helpful guide to cost so you can roughly estimate your expenses.
According to the Insurance Information Institute, the following is the average cost of these insurance policies across the United States for 2019. There will be a lot of variation based on where you live and your driving history, but this is a good reference point.
Collision Insurance | $381.43 |
Comprehensive Coverage | $171.87 |
Liability Insurance | $650.35 |
$1205.65 total per year, on average |
Who Should Consider Full Coverage Car Insurance?
Getting full coverage car insurance can be an excellent idea for some drivers. For others, it might be an unnecessary expense. If the following applies to you, full coverage can be a sound investment:
- New or expensive vehicle: Fixing and repairing new vehicles and high-end autos is expensive, and having more insurance coverage is a smart way to protect your purchase.
- Auto loan or lease: If you have a loan on your vehicle or you’re leasing it, you might be required to take out additional insurance. This additional coverage is how your lender or the lease company protects their investment in you. You might want to add extra insurance even if it’s not required.
- High-traffic area: If you live, work, or often drive in a high-traffic area, your odds of being in an accident increase. It just makes sense to add coverage when you are more likely to suffer damage or an injury.
- You can’t afford repairs: If you can’t afford to repair your vehicle, you may be better off insuring it just in case something happens, and you need insurance to cover repairs and replacements.
- Other regional factors: Other things to consider are how many car thefts happen where you are, the number of animal collisions, and if extreme weather is a concern.
Some people do not need that much insurance coverage. Of course, having the legally required amount for your state is necessary, but you might not need more if you rarely drive, live in a “safe” area, drive an older vehicle, and have ample money to cover expenses if you are in an accident.
Ways to Save Money on Full Coverage Car Insurance
If the idea of full coverage is appealing, but you’d like to get a deal, there’s some good news. There are several different ways you can potentially get a discount. The following are some ways you can save money on full coverage car insurance.
- Comparison shop
- Raise the deductible
- Drive within the law (i.e., don’t get tickets or
- cause accidents)
- Increase your credit rating
- Look for discounts (ex. safe driver, low
- mileage, accident-free, defensive driving course)
- Bundle policies
A tip when looking for auto insurance discounts – always ask what discounts are available. The agent does not know your whole situation and might miss some discounts you can cash in on.