Car insurance policy document with keys, representing full coverage auto insurance protection

What Kind of insurance do you need?

 

Full Coverage Car Insurance

Full coverage car insurance typically goes beyond the basic liability coverage required in most states. So, what is considered full coverage insurance? It’s a comprehensive package of protections, usually including collision and comprehensive coverage, designed to safeguard your vehicle and finances against a wide range of potential risks.

Collision coverage

Collision coverage kicks in if your car is damaged in an accident, regardless of who is at fault. While comprehensive coverage protects your vehicle from damage caused by theft, vandalism, natural disasters and animal encounters.

If you’re financing or leasing your car, lenders often require you to carry full coverage. That’s in addition to any other coverage mandated by your state, such as liability coverage, to ensure the vehicle is properly insured. But even if you own your car outright, full coverage auto insurance can be a good choice since it provides extra security when you’re on the road.

What does Full Coverage Insurance consist of?

 

Liability Coverage: Bodily Injury and Property Damage

Most states require liability coverage. It consists of two main components:

  1. Bodily Injury Liability: This covers injuries to others if you’re at fault in an accident.
  2. Property Damage Liability: This covers damage to other people’s property if you’re at fault.

These coverages are designed to protect you financially if you’re responsible for an accident that causes injury or property damage to others. They do not cover damage to your vehicle or any injuries you sustain.

Man and woman assessing car damage from a minor collision

Coverage

 

Comprehensive Coverage

Comprehensive coverage is your car’s safety net for unexpected events. It covers damage to your vehicle caused by things other than collisions, including theft, fire, vandalism and natural disasters.

Collision Coverage

Collision coverage covers repairing or replacing your car if it’s damaged in a collision with another vehicle or object, like a fence or tree. So, whether it’s a minor fender bender or a crash, this coverage can help you get back on the road without a significant financial burden.

Uninsured and Underinsured Motorist Coverage

Uninsured and underinsured motorist coverage covers your expenses if you’re in an accident caused by a driver who lacks the coverage to pay for your injuries or damages. This coverage provides peace of mind when others lack coverage.

Medical Payments Coverage or Personal Injury Protection (PIP)

These cover medical expenses for you and your passengers, including hospital bills, surgery, and sometimes rehabilitation. PIP, available in some states, can cover lost wages and other injury-related costs.

Optional Coverages

 

Gap Insurance

Gap insurance covers the ‘gap’ between what you owe on your car loan and what the car is worth. It can be helpful if your car is totaled or stolen while it’s still early in the loan period since new cars often depreciate quickly. This coverage ensures you’re not left owing money on a vehicle you no longer have.

Rental Reimbursement Coverage

This coverage helps keep you on the road when your car is out of commission. If your vehicle is being repaired due to a covered incident, rental reimbursement coverage can help pay for a rental. It helps keep your daily life uninterrupted.

Police officer with man and woman after an auto accident

Do I Need Full Coverage Car Insurance?

 

The decision of whether you need full coverage car insurance depends on several factors, including:

  • Value of Your Car: If have a new car or it’s expensive, full coverage can help protect your investment by covering repairs or replacement if damaged or stolen.
  • Financial Situation: If your car were damaged or stolen, could you afford to pay out-of-pocket for repairs or a replacement vehicle?
  • Lender Requirements: If you’re leasing or financing your car, your lender will likely require you to carry full coverage.
  • Personal Risk Tolerance: If you want maximum protection for your vehicle, full coverage might be the right choice, even if it’s not required.

Example of Full Coverage Auto Insurance

Imagine driving down the highway when a deer suddenly darts in front of you. You swerve to avoid it but hit a guardrail, causing significant damage to your car. In this scenario, your collision coverage would typically cover the cost of repairing your vehicle.

But what if the deer also collided with your car, causing additional damage? That’s where comprehensive coverage comes in. This coverage would pay for the repairs needed due to the animal collision, ensuring you’re not left with a hefty bill for damages caused by an unexpected event.

Full coverage insurance acts as a double layer of protection, safeguarding you from collision-related damage and unexpected events on the road.

Confident woman driving, reflecting full coverage car insurance protection

Who Needs Full Coverage Car Insurance?

 

Full coverage is particularly beneficial for many, but it may not be the right fit for everyone. Here’s a breakdown of who might benefit most from it:

  • You have a new or expensive car: The higher the value of your vehicle, the more costly it would be to repair or replace out of pocket.
  • You're still paying off a car loan or lease: Lenders typically require full coverage to protect their financial interest in your vehicle.
  • You live in an area prone to theft, vandalism or natural disasters: Comprehensive coverage can protect your car from these unforeseen events.
  • You drive frequently or have a long commute: More time on the road increases the risk of accidents, making collision and comprehensive coverage valuable.
  • You can't afford to pay for repairs out of pocket: Full coverage offers financial protection against costly repairs or replacement.

However, you may not need full coverage auto insurance if:

  • You have an older car with a low value: The cost of full coverage may not be worth it if your car isn't worth much.
  • You have a high deductible: A high deductible can lower your insurance premiums, but you'll be responsible for more out-of-pocket expenses in case of a claim.
  • You have enough savings to cover repairs or replacement: If you have the savings to handle unexpected expenses.

Pros And Cons Of Full Coverage Car Insurance

 

Full coverage car insurance offers a comprehensive safety net for your vehicle and finances, but it comes at a cost.

To help you weigh your options, here are the advantages and disadvantages:

Advantages

  • Broad protection: Full coverage protects your vehicle from various events, including collisions, theft, vandalism, natural disasters and more.
  • Financial security: It protects you from out-of-pocket expenses for repairs or replacement if your car is damaged or stolen.
  • Peace of mind: Knowing you’re covered in most scenarios can alleviate stress and anxiety about potential accidents or damages.
  • Lender requirements: Full coverage is often required if you’re leasing or financing your car.

Disadvantages

  • Higher premiums: Full coverage typically costs more than liability-only insurance due to the broader range of protection.
  • Deductibles: You’ll still need to pay a deductible before your insurance kicks in for repairs or replacement.
  • Not always necessary: If you have an older car with a low value or enough savings to cover repairs, full coverage might not be worth the extra cost.

Additional information about insurance

Woman reviewing insurance policy on phone after an accident

Misconceptions About Full Coverage

A common misconception is that full coverage offers total protection in all scenarios. However, no insurance policy can cover every possible event. For example, it won’t typically cover routine maintenance, wear and tear or mechanical breakdowns. Additionally, even with full coverage, your insurer may not pay out the full value of your car if it’s totaled or stolen, instead they will likely pay out the actual cash value of the vehicle. Also, your insurance premiums could increase even if you’re not at fault in an accident.

So, it’s crucial to understand your policy’s specifics and needs when deciding if full coverage is right for you.

Insurance adjuster assessing customer's car after an accident

Finding the Best Full Coverage Car Insurance

When shopping for full coverage car insurance and finding ways to save on premiums, compare quotes from multiple providers to find the best coverage at the most competitive price or consider utilizing AAA Triple Check® policy review to get the best insurance coverage. Consider factors like deductible amounts, coverage limits, discounts for bundling policies or good driving records.

Hands cupped over toy car on coins, depicting full coverage insurance costs

How Much is Full Coverage Insurance?

Full coverage car insurance costs vary based on your driving history, vehicle type and location. To find affordable insurance, consider your current coverage needs. Savings may be available by raising your deductible or maximizing discount opportunities.

Understanding the value of comprehensive insurance can help you make better decisions about your car insurance policy. Take the time to review your needs and be proactive in securing the coverage that best protects your vehicle and financial well-being.

Get A Free Car Insurance Quote From AAA

Let us help you get the right car insurance coverage for your personal needs.

This information is being provided for general informational purposes only. The Auto Club Group Does not assume any liability in connection with providing this information.

Coverage is subject to all policy terms, conditions, exclusions and limitations. Discounts and savings opportunities subject to eligibility requirements. Subject to underwriting requirements. AAA Insurance is a collection of aaa branded insurance products, services, and programs made available to qualified members. Personal lines insurance is underwritten by Auto Club Insurance Association, MemberSelect Insurance Company, Auto Club Group Insurance Company, Auto Club Property-Casualty Insurance Company, The Members Insurance Company, Universal Insurance Company, Auto Club South Insurance Company, Or Auto Club Insurance Company Of Florida. ©2024 The Auto Club Group. All Rights Reserved.

Discounts vary based upon eligibility. Discounts may not be cumulative and vary by state. Coverage varies by state and depends upon policy provisions. All Policies are subject to policy terms, underwriting guidelines and applicable laws. Insurance provided by CSAA IG Insurance Group, a AAA Insurer. © 2021 CSAA Insurance Group.