How does full coverage car insurance work, and what does it cover?
You may have heard the term, but do you know what full coverage insurance actually is? The definition can differ significantly depending on who you ask. We're here to clear this up so you can shop smarter.
Full Coverage Car Insurance Demystified
There is no such thing as full coverage when it comes to auto insurance. You may have heard the terms
"liability" and "full coverage" to describe the two classifications of auto insurance policies, but full coverage is just another way of saying "a policy with comprehensive and collision coverages."
Full coverage is confusing because it does not describe a specific set of coverage features. It's a broad term that means different things to different people. If you tell your agent you want a full coverage policy, chances are they'll ask you which specific coverages you want to include.
What Does Full Coverage Mean?
Essentially, full coverage insurance describes comprehensive and collision. Comprehensive and collision coverages protect your vehicle if it is damaged after you pay your deductible. The higher your deductible the less likely you are to file a claim, so your insurance carrier will offer a lower rate. The opposite is true for a lower deductible. These coverages are commonly purchased together, but it is important to know that they are separate and cover two different things.
From an insurance agent's perspective, when a consumer asks for a full coverage policy they want at least:
- The legally required minimum coverage for their particular state (liability coverage plus anything else required by the state)
- Comprehensive coverage
- Collision coverage
Other coverage is optional, so don't assume that saying "full coverage" includes everything that you might want.
What Doesn't Full Coverage Cover?
Since full coverage doesn’t describe specifics, you may not get all the coverage available to you on a normal insurance plan, including:
- Uninsured Motorist Coverage (unless legally required in your state)
- Medical or PIP Coverage (unless legally required in your state)
- Optional Death Benefit (only available in certain states)
- Custom Parts and Equipment Coverage (availability and amount varies by company)
- Rental Car Reimbursement
- Roadside Assistance/Towing and Labor
Being specific about what coverage you want (and don’t want) is important to discuss with your agent to avoid coverage lapses. If you assumed that full coverage includes roadside assistance, you may be surprised when you are forced to foot the bill for a tow or flat tire change.
As an insured you are always bound by the terms, coverage, and limits of your policy regardless of your request for “full coverage”, so be specific. A good agent will probe to find out what it is that you want and don’t want on your policy, but a smart shopper won’t leave something this important up to assumptions.
**Disclaimer**Though the term "full coverage" car insurance doesn't actually exist, the answers in the FAQ section assume full coverage comprises comprehensive and collision coverages.
Full Coverage Auto Insurance FAQs
Do I need full coverage on a financed car?
Most banks and auto lending companies will require the vehicle to be insured against physical damage for the duration of your loan term. In most cases, you have to carry full coverage while you are still making payments on your auto loan.
Can I get full coverage on a salvaged title vehicle?
Having a vehicle with a salvaged title does not automatically disqualify you from getting full coverage on it. Certain companies will not insure the vehicle, but there are plenty of companies that will so be sure to check with your current provider. Keep in mind insurance companies that will cover a salvaged title vehicle will most likely charge an additional fee and the actual cash value of your car will be much lower since it has already been totaled once before.
What's the difference: liability vs. full coverage?
Liability coverage is third-party insurance that pays for injury and damage that you cause to another driver, their passengers, and their vehicle. Full coverage will include liability and also comprehensive and collision coverage at the very least.
How much does full coverage insurance cost?
The cost of full coverage varies widely depending on a number of factors such as age, vehicle, and location. Shop around and compare quotes to ensure you get the lowest possible rates.
This article was written by one of The Zebra’s resident insurance experts. Each article is thoroughly researched to ensure we provide readers the most accurate — and helpful! — information possible. That’s insurance in black and white.®
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