You’ve probably heard people refer to “full coverage” but may be left wondering….what exactly is full coverage car insurance? With so many options available, it can be overwhelming trying to figure out which type of insurance suits your needs. Especially with all the insurance ads telling you you’re paying too much for car insurance.
In this article, we’ll explain the details about full coverage car insurance so that you have all the knowledge necessary for making an informed decision. Read on to learn more about protecting your vehicle and safeguarding yourself against potential financial losses.
Definition of Full Coverage Car Insurance
“Full Coverage” is a bit of a slang term that’s not actually used in an insurance policy. Often times you’ll hear people say, “Is that Full Coverage or Liability only”? It’s a popular term that generally refers to a policy that includes Liability, Collision, and Comprehensive coverage. However, being a blanket term it leaves out a lot of detail such as the actual coverages and the coverage limits.
Here’s a quick example: Let’s say I’ll give you full coverage on your smart phone that will cover anything that happens to it. I’ll sell you that insurance for $5/yr. That seems like a pretty good deal right? But what if the coverage limit is $25. Now you can see it’s not a good deal at all because that $25 is going to do little to replace your $1,000 phone.
Liability coverage is required by law. It covers bodily injury and property damage that you may cause to others while driving your car. This coverage only pays out if you are at-fault. If you are not at-fault in a collision, the other drivers insurance will be responsible for these damages.
Collision coverage pays for damages to your own car caused by a collision with another vehicle or object when you are at-fault. If you don’t have this coverage your policy will pay to repair the other drivers vehicle, but it won’t pay to repair yours.
Comprehensive coverage covers non-collision damages such as theft, vandalism, and natural disasters like hail, wind, flood and fire. If you have a loan on your car, your lender will likely require you to carry Comprehensive and Collision coverage in addition to Liability until your loan is paid off. This is to protect their interest in that vehicle until you have repaid them the money borrowed.
It’s important to note that full coverage does not actually cover every possible claim scenario. Nonetheless, having full coverage car insurance provides a higher level of protection than just liability insurance. It can give you peace of mind while on the road.
What Types of Coverage are Included in Full Coverage Car Insurance?
We’ve covered Liability, Comprehensive and Collision. However, most people underestimate just how important some of the other coverages on your auto insurance policy can be. Your “Full Coverage” could be useless if you chose a low quality policy.
Additional coverages may include Uninsured/Underinsured Motorist coverage, Personal Injury Protection, Med Pay and Separate Glass coverage. Uninsured/Underinsured Motorist coverage can help protect you if you’re in an accident with someone who doesn’t have enough insurance, doesn’t have insurance at all or is a hit-and-run driver.
A 2021 study by the Insurance Research Council showed 1 in 8 drivers are uninsured in the US. This is a coverage you don’t want to forego in order to save money.
Fun fact: Mississippi had the highest uninsured motorist rate at 29.4%! New Jersey had the lowest at 3.1%.
Personal injury protection (depending on your state) can help cover medical expenses for you and your passengers following an accident. Separate glass coverage can help replace your damaged windshield without having to pay your Comprehensive deductible.
How Much Does it Cost?
On average, a policy with Comprehensive and Collision costs about 2 1/2 times more than a policy that has Liability coverage only. Of course there are going to be many factors that go into pricing the policy. Claims history, driving record, age, credit score and value of the vehicle are just a few.
Although full coverage insurance carries a higher price tag, it gives you the peace of mind knowing that your car is covered. In addition, having this type of policy can provide protection in case any unforeseen accidents or incidents occur. As mentioned earlier, if you have a loan on your car, you’re probably not going to have a choice anyway.
How to File a Claim with Full Coverage Car Insurance
In the event of a collision, and the other party has admitted fault, you need to get a police report. We can’t overstate how important this is. Without one, the other person can change their story when they speak to the claims adjuster. We’re seeing it happen more and more lately. In this case, you’ll likely be held 50% responsible, and end up paying higher insurance rates for the next 5 years. Ouch!
The next step is to contact your insurance carrier and provide them with all the necessary information, such as the location of the accident, the extent of the damages, and any injuries that may have occurred. If the other driver is at-fault you’ll want to contact their insurance company to file the claim and then let your insurance company know that you have done so. Don’t just take their word they’re going to file the claim in a timely manner. You always want to call and verify.
From there, your provider will guide you through the claims process and may even recommend specific repair shops to use. Remember to document everything and communicate openly with your provider, and soon enough, you’ll have your car back on the road in no time.
Free Policy Review
If this is all just too much to hassle with, and you’d rather just have someone review your policy, we would love to help. Just use this Policy Review link to upload your policy and we’ll send back the changes we would recommend you make to your policy coverages. We provide this at no charge.
Of course, we’d love to have your business, but even if we only provide this free service we’ll know that we’re contributing to controlling the cost of insurance for everyone.
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