Find The Best Full Coverage Car Insurance

If one of your financial priorities is getting good auto insurance coverage, you’re likely looking at “full coverage car insurance” plus other options. Full coverage car insurance is not a special policy type but rather a term that usually means a policy with liability, collision and comprehensive coverage.

• Liability insurance: For accidents that you’re at fault, liability insurance covers the cost of the other party’s injuries and car repairs. It also pays for your legal defense if you’re sued for the car accident.
• Collision insurance: Covers the cost to repair your vehicle but doesn’t cover the cost of the other party’s vehicle damage. Collision insurance can pay for vehicle damage from another car hitting yours, or a situation where you accidentally back into a pole or accelerate into a building.
• Comprehensive insurance: Covers car theft and damage to your car related to weather, fire, flood, vandalism and falling objects. It also covers damage from hitting animals such as deer.

These coverage types make a solid starting point for good auto insurance.

Full Coverage Car Insurance Summary

How Much is Full Coverage Car Insurance?

Nationwide, car owners spend an average of $935.80 a year on their auto insurance, a number that includes both minimal and high coverage choices.

The liability portion of an auto insurance policy is generally the most expensive component.

Components of Full Coverage Car Insurance

Knowing what type of coverage you need isn’t always easy to figure out. Here’s a breakdown of how each coverage type works.

Liability Coverage

All states except New Hampshire require car owners to purchase a minimum amount of liability car insurance. These minimum state requirements outline two types of liability insurance:

• Bodily injury liability insurance covers the medical expenses of another party if you’re at fault.
• Property damage liability insurance covers damage done to another person’s property that you crashed into. This could include someone else’s car, mailbox, fence, garden gnome collection or building.

For example, let’s say you ran a stop sign and collided with a man driving a Toyota Camry. The vehicle needs some repairs and he required a few stitches to his forehead. Since you were at fault, liability insurance would cover the cost to repair his car and his medical expenses — both up to the coverage limits of your policy.

If you purchased low limits and injuries or damage exceed your limit, you can still be sued for the rest. That’s why buying a high level of liability insurance is a smart move, especially if you have savings or other assets that make you an attractive lawsuit target.

Consider at least liability limits with $100,000 in bodily injury liability per person, and $300,000 per accident, and $50,000 and up for property damage liability. Drivers with high incomes and/or significant assets should consider higher amounts in case someone decides to sue, plus umbrella insurance.

Does Liability Insurance Cover My Car If Someone Hits Me?

Your own liability insurance only pays others for damage you do. It will not pay anything for your own car or your injuries.

If someone else causes an accident, their liability insurance should cover your car damage and injuries. But the other person’s insurance will only pay up the limits they bought. If the accident was expensive, their insurance may not be enough to cover all your bills.

In addition, many drivers hit the road without any auto insurance at all. If they crash into you, they have no insurance to pay for the damage they cause. You can sue another driver who causes a crash, but not all drivers have assets to use to pay for a lawsuit judgment.

Collision and Comprehensive Coverage

Collision and comprehensive coverage are important for covering damage to your own car. Your liability insurance won’t pay for any of your car damage. If you own your vehicle outright then this coverage is optional. Expect to have to buy them if you have a car loan or lease.

Collision insurance pays for damage to your car from crashes with any object, such as a pole or guardrail. Comprehensive coverage pays for car theft and  repairs due to weather, animal damage, vandalism, fire, flood and falling objects

For example, let’s say your car tires slipped on ice and you and ran into your neighbor’s fence. Collision coverage would pay for the repairs to your vehicle. Liability insurance would pay for the neighbor’s fence.

If you drove across a flooded street without realizing how deep it was, comprehensive coverage would pay for car damage.

Collision and comprehensive coverage both have a deductible, such as $500 or $1,000. That’s the amount of money deducted from an insurance check if you make a claim.

What is Recommended for Car Insurance Coverage?

Building out the best auto insurance policy usually requires adding a few more options to full coverage car insurance: Uninsured motorist coverage and personal injury protection. These types cover injuries to you and your passengers in different ways. In some states these are required.

Uninsured Motorist Coverage

Uninsured motorist coverage helps safeguard you against folks who are on the road with no auto insurance. Typically, if you’re injured in a car accident where the other driver is at fault, their liability coverage should cover your medical expenses. But if the other driver is uninsured, uninsured motorist coverage would help cover your medical bills.

A similar coverage, underinsured motorist coverage, pays your medical bills when the other driver is at-fault but doesn’t have enough liability insurance to cover your costs.

As with other kinds of auto insurance, these types pay up to the limit you have chosen. Buying low limits can mean you still have unpaid bills after an expensive car accident.

Medical Payments Coverage and Personal Injury Protection

Medical payments coverage (MedPay) covers medical expenses of you and your passengers no matter who was at fault. This can include ambulance, surgery and  X-rays. It’s not available in all states.

Personal injury protection coverage (PIP) will also help cover medical expenses no matter who was at fault. Some states require PIP insurance. In other states it’s optional or not offered. PIP insurance can also pay for lost wages and for hiring help for tasks you can’t do because of an accident, such as child care.

Auto Insurance Extras

Rental Reimbursement Coverage

If your vehicle is out of commission because it’s in the repair shop, you may have to rent a car. Rental reimbursement coverage helps cover the cost of a rental car if the repairs are being covered under your insurance.

Usually, rental car reimbursements have daily and maximum limits. So make sure you understand the reimbursement limit before you rent a luxury SUV for a week. If you exceed the rental limit you can pay the difference yourself.

This is not the same as rental car insurance, which covers cars you rent for vacations and other non-accident purposes.

Roadside Assistance

Roadside assistance insurance can pay for services such as help changing a tire, bringing you gas or lock-out assistance. If you already have roadside assistance from your car maker or a AAA membership, you don’t need this insurance.

Gap Insurance

If your car gets totaled (or stolen) and you make a collision or comprehensive claim, your insurance company will pay you a settlement based on the actual cash value (ACV) of the vehicle. But this settlement may not cover your auto loan or lease balance. This could leave you upside-down on your loan or lease.

If you have gap insurance, it will cover the difference between the settlement and the amount you still owe on the vehicle. Some lenders require gap insurance if you financed the car. If you have a lease, it might already be included in the cost.

Ways to Lower the Cost of Full Coverage Car Insurance

No matter what auto insurance options you choose, you don’t want to overpay. Here are ways to lower your bill.

Price shop: Before you purchase a policy, shop around for insurance quotes. Make sure your quotes include the same coverage types and limits so that you’re comparing apples-to-apples prices. Comparison shopping alone can save you hundreds of dollars.

Take higher deductibles: A deductible is the amount deducted from an insurance check. Collision and comprehensive insurance have deductible choices such as $500, $1,500 and $2,000. When you raise your deductible amount you should save some money. There’s no deductible on liability insurance.

Maintain good credit: Many auto insurance companies use credit as a factor in pricing policies. They use a credit-based insurance score, which is slightly different from a regular insurance score. Insurers believe that credit can be used to predict whether you’ll make claims. Improving your overall credit history should in turn improve your credit-based insurance scores.

Take advantage of discounts: Car insurance discounts for bundling multiple policies and insuring more than one vehicle are common. You’ll also likely find low mileage discounts, safe driver discounts and price breaks for everything from going paperless to setting up automatic EFT payments.

Your car insurance policy is only as good as your next claim. If you’ve bought minimal coverage you can find yourself stuck with repair and medical bills to pay out of pocket. Buying ample car insurance is a way to protect the financial future you’re building.