What is full coverage car insurance?
The term "full coverage" is rather misleading. Full coverage somehow implies that you will be fully covered in any situation and any accident. No car insurance agent will ever be able to say that you will be fully covered against all loss (just look at the recent accident in Japan. Imagine if that Prius owner was at fault for all that damage!). The best term to use would be "sufficiently covered". When someone refers to full coverage, they likely mean having coverage under all types of car insurance that cover all situations that can occur with your car. Also, a "fully covered" vehicle will have enough dollar amount coverage to cover the most likely level of claim; as long as you don't take out several Ferrari's!
The least amount of coverage that you are required to have in your state if you are a licensed driver is liability coverage. All licensed drivers are required to have liability coverage. This is a law for all states although the minimum amount of required coverage varies depending upon the state. Just because you don't drive a vehicle doesn't mean you aren't required to have liability coverage. If you are a licensed driver, then you must have liability coverage whether it's owner's or non-owner's liability coverage. Owner's liability coverage is for those who have a registered vehicle in their name. Many owner's policies will also list all licensed drivers in the household who could potentially drive the vehicle. Non-owner's liability is required for licensed drivers who don't own a full time vehicle and have the potential to drive occasionally.
So what is "full coverage" car insurance?
Car insurance that has the following coverage's are considered sufficient coverage:
- Bodily Injury and Property Damage Liability. This is the minimum coverage required by state laws for all licensed drivers. Required minimum coverage varies by state. $100,000/$300,000 bodily injury coverage typically recommended. $50,000 property damage recommended.
- Uninsured and Underinsured Motorist Bodily Injury. Covers bodily injury caused by uninsured or underinsured drivers. Not required by state laws but $100,000/$300,000 is typically recommended for sufficient coverage.
- Medical Expenses Coverage. Covers medical expenses for you or any other passengers in case of an accident. Will typically cover those involved before any other personal health insurance policies. Some states require this coverage and $5000 per person per accident is typically recommended or required depending upon your state.
- Collision. Covers your vehicle for damage or repair up to the actual cash value (ACV) of your vehicle. Cost varies depending upon the risk level and ACV of your vehicle.
- Comprehensive. Covers your vehicle for all non-collision related damage such as theft, storm damage, flood, hail, hit and run, etc. Basically, this is the catch all coverage for damage that you had no control over.
If you have all five of these coverage's at the suggested coverage levels, then you will be sufficiently covered for most types of claims that may come your way. If you want further protection (even closer to "full coverage"), then you can also purchase an umbrella policy which typically covers you for liability above and beyond your car insurance liability. These policies are very reasonable at a few hundred dollars per year for up to $1 million in additional protection.
Where can I find the best deal on car insurance?
If you are shopping for car insurance and want to compare rates, then we suggest that you compare policies and rates from several insurers. We recommend Insureme who allows you to compare several rates from dozens of major, highly rated insurers such as Met Life, Allstate, AIG, and more. They are also unique in that they include independent insurance agent quotes as well.
This should not be considered financial advice which can only be given by a qualified financial professional. We suggest you consult with a qualified financial planner and/or insurance professional who is most qualified to consult with you regarding policy decisions. Many factors are involved in your policy premium some of which may not be mentioned in this article. We are an affiliate of the Bankrate Insurance Network.
Return to Best Insurance Deals - Get Free Quotes / Car Insurance as low as $20/month!
Home/ Contact Us / Links/ Site Map/ Privacy/