What does “full coverage” car insurance mean?
Full coverage car insurance can mean different things depending on the driver. Generally, a full coverage car insurance policy meets state requirements for liability insurance and includes comprehensive and collision coverage. However, you can have higher liability limits than your state requirements. You can also include a combination of optional coverages that offer more protection while you’re on the road.
What Does Full Coverage Car Insurance Consist Of?
Full coverage car insurance consists of combinations of different types of car insurance coverages. Full coverage car insurance can include:
Underinsured and Uninsured Motorist Coverage
If you get into a car accident with a driver who doesn’t have insurance or enough coverage, it could leave you at risk of paying for damages out of pocket. There are three coverages that make up underinsured and uninsured motorist insurance:
Rental Car Reimbursement
Rental car reimbursement coverage can pay your costs to drive a rental car while your vehicle gets repaired following a covered accident. This is an optional coverage, but some drivers find it valuable to have in a pinch.
Medical Payments Coverage
This coverage can help pay for medical care for you and your passengers if you’re hurt in a car accident. It can also help cover funeral costs if someone loses their life.
Personal Injury Protection (PIP)
Also known as no-fault insurance, PIP helps pay treatment costs and other expenses, like childcare if you’re healing from a covered accident. Be aware that PIP isn’t available in every state.
Most states have requirements for the minimum amount of liability coverage drivers need to carry. This insurance can help cover property damage or bodily injury.
Bodily injury liability insurance helps pay for another person’s medical bills if you’re at fault for an accident.
Property damage liability insurance helps cover the costs to property damaged in an accident that you’re found at fault for.
With comprehensive insurance, your auto policy can help pay to fix your
car if it’s damaged from:
- Collision with an animal
- Natural disasters
With collision coverage, your policy can help pay for damages to your car if you hit another vehicle or object. For example, if you hit a tree while driving, this coverage can help pay your repair costs.
If your car breaks down and you’re stranded on the side of the road, emergency roadside assistance coverage can help. With this insurance, policyholders have access to a network of 40,000 towing services of AARP (Auto & Home Insurance From the Hartford) in the country, available to call 24/7. Be aware you’ll need comprehensive insurance to add this coverage to your auto policy. For more information
The total cost of full coverage car insurance
Full coverage insurance is significantly more expensive than basic coverage, mostly due to the inclusion of collision and PIP/MedPay insurance. We got a quote for a 30-year-old male driver from New York, to show how each individual component breaks down in price. For this quote, full coverage (not including PIP since that is mandatory in New York) cost 86% more and added an additional $251 per six months, or $502 for the year.
We looked at five major cities, to see how costs between basic and full coverage differed. In every city, the cost of getting full coverage was more than double the cost of basic, state minimum coverage.
In the case of Massachusetts, full coverage was nearly triple the costs of basic coverage. Is it really worth it to pay so much more for coverage, that, by law, you are not required to have?
How Much Is Full Coverage Car Insurance?
According to the Insurance Information Institute, the average cost for full coverage car insurance in the U.S. in 2017, which included liability, comprehensive and collision coverages, was $1,004.
However, full coverage car insurance can vary. Each state has its own car insurance laws and minimum coverage requirements, which will impact insurance rates. The more coverages you add to your auto policy, the more your policy cost will increase.
It’s important to not only consider cost when you’re looking for car insurance. A car insurance policy with a lower rate may not offer you enough coverage. While full coverage car insurance is typically more expensive, it can give you peace of mind and save you money in the long run.
Why you should get full coverage
In the event of an accident, opting for only liability insurance and forgoing the “first-party” benefits of full coverage, means a long, uncertain claims process where you have to deal with another insurer rather than your own. Filing through another person’s insurer means there is a higher chance the claim may not be approved, or you may have to settle for an amount less than what you wanted. Filing through another insurer also means needing
to prove who the “at-fault” driver, which in many cases, can be difficult to determine, and sometimes depends on the state you are in.
There is an inherent risk in hoping that someone else’s insurance will be able to cover that full amount. Not to mention it can take weeks or months before you actually see a pay out for your medical bills if you go through another driver’s insurer. At least with PIP, you know for certain you are covered up to a certain amount and can see payment as soon as you file the claim.
How to make full coverage more affordable
Full coverage is expensive but can be more affordable. There are several things you can do that can save you on your yearly bill. The first is to control your deductible on your collision and comprehensive coverage. As we mentioned above, the lower the deductible, the more you will pay every month. If you set aside some money in your savings account for your deductible, perhaps you can raise it a bit and thus have easier monthly payments.