What is Full Coverage Auto Insurance?
There’s not actually a universally-recognized definition of full coverage car insurance — the included coverage varies from insurance company to insurance company and state to state – sort of how the size of a “large” order of French fries can vary depending on the restaurant.
However, the general concept of full coverage auto insurance remains the same wherever you go: a bundle of insurance coverages meant to financially protect you in a wide variety of vehicle-related scenarios.
Full Coverage Auto Insurance often includes popular coverage categories, such as:
- Liability: Covers costs incurred as the result of injuries and property damage caused by your vehicle. Most states require you to have liability coverage.
- Collision: Covers damages to your vehicle caused by making contact with another automobile or object, like a wall or a street light.
- Comprehensive coverage: Covers less common causes of damage to your vehicle, like flooding or being hit by a downed tree. It can also be helpful in cases of theft, vandalism, or if you hit an animal.
Some states require you to have additional types of coverage beyond those listed above and are often also bundled into full coverage car insurance. For instance:
- Personal injury protection (PIP): Helps cover medical expenses and lost wages for you and your passengers stemming from accident-related injuries.
- Uninsured coverage: Can help reimburse you if you’re in a collision with a driver who is not sufficiently insured.
Just a reminder: it is extremely rare for full coverage auto insurance to cover personal property in your car. In most cases, you’d need to rely on renters insurance or homeowners insurance to cover this property.
Do I Need Full Coverage Car Insurance?
Every state requires some level of auto insurance. In most cases, state minimum coverage only includes liability insurance (up to the limit required by your state) and uninsured motorist coverage, but those requirements definitely vary from state to state.
If your car is purchased with a loan, your lenders have a financial stake in your vehicle and will often require you to go beyond your state’s minimum requirements to get comprehensive coverage and collision coverage, two common components to Full Coverage Auto insurance.
That being said, your first step is to research your state’s insurance minimums and explore any additional requirements mandated by your lender or other parties. Once you know what you absolutely need, then you can begin to answer the ultimate question: is it worthwhile to go all the way and pay for full coverage?
Full Coverage Auto Insurance can be a godsend in situation where your car incurs damage from an event not involving an accident, such as vandalism, flooding or any natural disaster. It can even cover you in situations such as auto theft.
On the other hand, full coverage car insurance can carry significantly higher premiums than the minimal coverage options mandated by your state. This fact alone may dictate that this level of coverage may not be a good fit for your budget.
Also, if you have a very low-value vehicle, remember that it might be cheaper for you to avoid full coverage and, if tragedy befalls your vehicle, cover the cost of a replacement on your own.
How much is full coverage auto insurance?
As we previously mentioned, full coverage auto insurance can be significantly more costly than the lesser coverage options required by state law. However, there are ways to minimize the cost of the former option to make it more affordable for you.
- Request quotes from a variety of insurance companies (The JG Wentworth Marketplace is a great place to start!), comparing the types and amounts of coverage that each one can offer you at various price points.
- Think about raising your deductible, or the amount you’ll be on the hook to pay towards a repair or replacement before coverage kicks in – a surefire way to lower your premium.
- Improving your credit score can also help reduce the cost of auto insurance.
What’s the Bottom Line?
Deciding whether to get full coverage auto insurance for your vehicle isn’t an easy one, but looking at a few common factors should point you in the right direction. Find out how much insurance your state (or, if applicable, your lender) requires, and then explore your options with a few reputable insurance companies. To make this process easier, go to https://marketplace.jgwentworth.com/ and check out the industry-leading options we’ve assembled all in one place.*
Based on your car’s value, is it worth your while to upgrade your coverage and gain extra security, or would it end up being a waste of money?