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Sometimes it doesn’t pay to skimp on a purchase because it could end up costing you much more money in the long-run. Auto insurance is one of those purchases. Car insurance is intended to protect you from devastating financial loss in the case of an accident, so you want to make certain you get the best full coverage car insurance policy you can afford to protect your assets.
Your state has minimum requirements in place for the amount of coverage you need to buy. Full coverage insurance goes above-and-beyond those requirements to make sure you’re protected against additional risks. This can pay off if your vehicle is damaged by a collision, hail, or some other event.
This review will cover the basics of full coverage auto insurance and will help you to find and compare the best options, so you can get the policy that’s right for you.
On this page:
- What is Full Coverage Insurance?
- How Much is Full Coverage Car Insurance
- Who Needs Full Coverage Car Insurance?
- How To Find the Best Full Coverage Auto Insurance
What is Full Coverage Insurance?
Full coverage car insurance is insurance that goes beyond the minimum insurance required in your state. Most cheap car insurance policies include liability insurance, which provides compensation if you cause bodily injury or property damage to other people. Some states also require you to buy no-fault coverage, which provides you with compensation for medical issues in an accident regardless of who was at fault for the collision. However, state laws generally do not require you to buy policies that protect you from losses that aren’t caused by other drivers.
For example, your state’s minimum automobile insurance requirements almost assuredly don’t require you to buy coverage to pay for the repair or replacement of your vehicle if it is destroyed, lost, or damaged due to theft, vandalism, hitting a tree or deer, or a natural disaster, such as hail or flooding. And, unless you live in a no-fault state, your state also won’t require you to buy a policy that pays for your own medical bills or loss of wages if you cause a crash.
Full coverage insurance goes beyond the minimum to include at least two important types of coverage: collision and comprehensive insurance.
Collision & Comprehensive Insurance
Collision insurance provides you with coverage if you get into a car crash that’s your fault, or if you get into a car crash with something other than another vehicle. For example, a collision policy will pay for the repair or replacement of your car if:
- You hit another vehicle
- You hit a tree
- You hit a deer
- You go around a curve too fast and your car rolls over
Comprehensive insurance, on the other hand, covers you if your car is damaged, destroyed, or stolen when you are not driving it. For example, if you have comprehensive insurance, you could be covered if:
- Your car is stolen
- Your vehicle is destroyed due to a fire in your garage
- Your car is damaged as a result of hail
- A tree falls on your vehicle
Typically, collision and comprehensive policies reimburse you for the current value of your vehicle, minus your deductible. They do NOT recompense you for the amount it would cost to buy a brand new car. If your vehicle is damaged but repairable, the policies could also pay for repairs.
Because collision and comprehensive coverage provide coverage only for the value of the car, buying full coverage auto insurance may not make sense if you’re driving a very old car that isn’t worth much. However, if you’re driving a vehicle with a modest value, say $10,000, and you can’t afford to replace it if it was totaled in an unexpected incident, then you should strongly consider buying full coverage insurance. The policy would protect you from loss and the additional disruption that would occur in your life if the car was destroyed and you couldn’t afford a new one.
Other Types of Insurance Coverage
Depending on the insurer that you get coverage from and your state’s regulations, your full coverage auto insurance policy may also include additional types of coverage as well, such as uninsured or underinsured motorist coverage.
However, these additional types of insurance—called supplemental coverage—would need to be added to required minimum coverage and your insurance premiums would be higher because of it. You should always carefully review what’s included in your policy to ensure you need all the coverage you’re getting and to make certain that these added types of coverages are worth paying for.
Some examples of different kinds of coverage that you may want to include in your policy include:
- Underinsured and uninsured motorist coverage: Some, but not all, states require you to buy this coverage. These policies cover your losses if you get into an accident with another driver who is at fault, but who doesn’t have the necessary insurance to pay your bills.
- Personal Injury Protection (PIP) coverage: Some states require you to buy PIP coverage but it’s optional in others. PIP coverage provides you with payment of medical bills and, in some cases, partial lost wages if you get into an accident and you’re hurt.
- Gap insurance: If you have a car loan, your used car may be worth less than the remaining balance due on the loan. If this is the case and you get into an accident, your insurance company would only reimburse you for the market value of the car, and you’d need to pay the remaining balance on your auto loan. Gap insurance covers this difference for you. Your lender may require this, or you may want to buy it simply to protect yourself. For example, if you owe $12,000 on a car worth $10,000, your gap insurance policy would pay the $2,000 you still owe the lender if the car is totaled.
- Loss of use coverage / rental car reimbursement: It can take a long time for a car to be repaired after an accident, and it can also take a while to resolve an accident claim and get a vehicle replaced. If you have loss of use coverage or rental car reimbursement, your insurance will pay for the cost of a rental car in the interim while the accident claim is being sorted out and your car is being repaired. This is important for people who require a vehicle to get to work, and who have no other alternatives.
How Much is Full Coverage Car Insurance
The cost of full coverage car insurance varies widely depending on your driving history; the age of drivers who use the vehicle; your location; and the specific vehicle that you drive.
>> Read More: What is the average cost of owning a car?
For example, if you have a teenager on your policy, or if you live in a city in New York or California where prices or the risk of accidents are higher, then your insurance rates will be much higher than if you’re the only driver of a vehicle, you live in a suburb in the South, and you have had a clean driving record for the past 10 years.
To help give you an idea of how full coverage auto insurance may impact your rates, we gathered quotes from four major car insurance companies. For each quote, the driver was a 30-year-old unmarried man living in Asheville, North Carolina with no major accidents in the past three years who is driving a 2015 Honda Accord and who has a $1,000 deductible for the comprehensive and collision coverage.
The table below shows how car insurance quotes differ depending on whether you opt for minimum coverage or for full coverage.
|Insurance Company||Full Coverage||State’s Minimum||Difference|
Who Needs Full Coverage Car Insurance?
While not every driver needs full coverage auto insurance, many motorists do. For example, you should likely get full coverage car insurance if:
- Your car has a fairly high value: If the total cost of replacing your vehicle is the equivalent of just a year or two of premiums for full coverage auto insurance, you probably don’t need the extra coverage. You could save those premium amounts in a savings account for that year or two instead of paying the insurer, so you’d have the cash available to replace the vehicle if you need to.
- You need a car and you couldn’t afford to replace it: If you need a vehicle for work or to fulfill family obligations and you would not be able to buy a new one if something happened to the car, then you need insurance to make certain you can get a car if something happens to the one you have. You don’t want to end up in a situation where you have neither a vehicle, nor a way to earn your income.
- You don’t own your car in full: If you have a lease or car loan, you’re likely going to be required to have full coverage insurance. Even if not required, you should still strongly consider full coverage in unless you could afford to pay off the loan in full even if something happened to the car.
How To Find the Best Full Coverage Auto Insurance
These tips will help you to find cheap full coverage auto insurance that provides the protection you need.
You can use our above examples to get an idea of what a policy will cost, but remember that your coverage will vary depending on your own unique situation. You should get individualized quotes from several insurers to find the best rates. Fortunately, getting quotes is easy. With most insurers, you can simply visit their website, enter some basic information about you and the car you want to insure, and find out what your rates would be for different kinds of coverage.
Bundle Your Policies
If you have any other types of insurance—such as a homeowners policy or a policy for another car, boat, motorcycle or another vehicle—you should ask the insurance company if they offer car insurance discounts for bundling these policies. If so, you should be able to save by getting your auto insurance through the same company. Multi-policy discounts are very common and can substantially reduce the costs of all of the different kinds of insurance you need.
>> Read More: Best home and auto insurance bundles
Ask for Other Discounts
The auto insurance industry is very competitive, and many companies are willing to offer savings in order to win your business. So, when you’re shopping around, always ask the insurer if they offer any kinds of discounts. It’s common for insurers to offer discounts for teen drivers if they can prove they have good grades or took drivers education, for example. You could also get discounts based on a clean driving record, for opting for paperless statements, if you don’t drive many miles in a year, or if you work for a particular employer or are a member of certain professional organizations.
Sometimes, small local insurers offer insurance policies at a more affordable rate than major insurance conglomerates. Try running a few quotes from both types of companies to find the best car insurance rates. You can always check with your state’s insurance commissioner or with the Better Business Bureau to find out how an insurance company is rated and make sure they provide good service with minimal complaints from policyholders.
Bottom Line: Cheap Full Coverage Auto Insurance Quotes Are Available
Full coverage auto insurance will provide you with comprehensive protection if there’s a problem with your car. It’s possible to find affordable policies, but you will need to do some shopping around and get quotes from several insurers to find a good policy at the right price.
Author: Christy Rakoczy