What Does Full Coverage Mean for Auto Insurance?

What Does Full Coverage Car Insurance Mean?

When financing or leasing a vehicle, your lender may use the term “full coverage,” but that simply means they’re requiring you to carry comprehensive and collision plus anything else your state mandates. Liability is a required coverage in nearly every state, while comprehensive and collision (physical damage coverages) are optional.

Instead of asking, “Am I fully covered?”, ask your local insurance agency if you have the right coverages. Paying for every protection offered by an insurance agency could be a waste of money.  Conversely, while your lender may consider state-minimum liability as sufficient, that may not be enough coverage to properly protect you and the other drivers on your policy. Your coverages should be customized to you, your family, and your vehicle.

Liability vs. Full Coverage

Liability-only coverage on your auto policy means you’re covered, but with limitations for damages or injuries you cause to someone else. A liability-only policy will not cover damages to your vehicle. You need to add comprehensive and collision coverages in order protect your vehicle against physical damage. This is why many insurance agents, and car dealerships describe Full Coverage Auto Insurance as liability plus comprehensive and collision.

Your lender may use the term “full coverage,” but that simply means they’re requiring you to carry comprehensive and collision, plus anything your state mandates.

Should I Add Additional Coverage

Additional coverage is not required, but a new vehicle is an important investment and should be protected as such. Comprehensive and collision will pay for damages to your vehicle due to accidents and incidents that are both in and out of your control.

If your vehicle’s value is extremely minimal (less than $2,000), it may not make sense to carry physical damage coverage. Should you decide to select liability coverage only, make sure you’ll be able to purchase a new vehicle out of your own pocket in the event it’s totaled and uninsured.

Extra coverage like roadside assistance or rental car reimbursement is typically inexpensive and can be purchased at your discretion as well.

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 will depend on many factors, including the year, make, and model of the vehicle you want to protect, plus the deductible you select (the cost of comprehensive and collision coverage will decrease if you choose a higher deductible). Keep in mind that a policy with extensive coverage can be more affordable than you might think, as Progressive offers many discounts to help you attain cheap full coverage car insurance.

Common Coverage Offered By Insurance Carriers

Liability: If you’re at fault in an accident, liability coverage pays for damages or injuries you cause to others, plus lawsuit costs if you’re sued, up to your policy’s limits. See more on liability coverage.

Medical Payments: Regardless of fault, medical payments can cover medical bills and funeral expenses if you’re in an accident. Coverage extends to family members and your passengers. In some states, personal injury protection substitutes for medical payments and covers you similarly. See more on medical payments.

Uninsured/Underinsured Motorist Insurance: Uninsured/underinsured motorist insurance pays for injuries and/or damage to your vehicle, up to specified limits, if you’re hit by a motorist with no insurance or not enough coverage.

Comprehensive: If your automobile is damaged or totaled due to an accident out of your control (theft, vandalism, fire, glass breakage, hitting an animal or  weather related issues), comprehensive auto insurance can pay to repair or replace your vehicle, minus any deductible. See more on comprehensive coverage.

Collision: Collision coverage can pay to repair or replace your vehicle, minus your deductible, if your vehicle collides with a car, motorcycle, tree, guardrail, or any other object—regardless of fault. See more on collision coverage.

Lease Payoff Coverage: Also known as “gap insurance,” loan lease payoff coverage can cover the difference between what you owe on your vehicle loan and what the vehicle was actually worth before it was totaled. See more on gap coverage.

Rental car Rimbursement: If you’re involved in a covered accident and unable to drive your vehicle, rental car coverage can reimburse you for the cost of a rental car while your vehicle is being repaired. See more on rental car reimbursement.

Roadside Assistance: If your vehicle is disabled for any reason, our roadside coverage provides towing to the nearest repair facility or up to 15 miles to the mechanic of your choice.

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