Do I Need Full Coverage Auto Insurance? Find Answers Here

Nobody wants insurance coverage that’s full of gaps. Unfortunately, when people buy the minimum amount of insurance required by state law, this is what they can end up with. If you want to make sure you’re fully protected, you need full coverage auto insurance.

What Insurance Is Required?

Each state sets its own requirements for auto insurance. Most states use an at-fault system, which means that the driver who is determined to be at fault is responsible for the other party’s property damage and medical costs.

To ensure that each driver will be able to pay for any damage or injuries they cause, states establish a minimum insurance requirement. This is usually expressed in three numbers:

  • The first number refers to the minimum amount of liability coverage for bodily injury to a single person.
  • The second number refers to the minimum amount of liability coverage for bodily injury to two or more people in a single incident.
  • The third number refers to the minimum amount of liability coverage for property damage.

If you obtain this coverage, you may think that you’re set. According to the state’s requirements for driving and registering vehicles, you probably are. However, this is only the minimum amount of coverage you are required to have. Depending on your circumstances, you may need more. This can include higher limits to protect your assets. It can also include additional types of coverage.

What Is Full Coverage Auto Insurance?

While liability insurance is important, it doesn’t cover everything. For example, it doesn’t cover damage to your own vehicle. This why many people recommend full coverage auto insurance.

Full coverage auto insurance may not be the official name of a policy, but it’s generally used to refer to robust coverage that includes liability insurance as well as comprehensive and collision insurance.

  • Collision insurance covers damage to your own vehicle that occurs in a crash. For example, if you hit a tree, or if your vehicle rolls over, collision insurance can cover this.  
  • Comprehensive insurance covers many other types of damage, including damage caused by animals, fire or natural disasters and damage caused by criminal activity, such as vandalism and theft.

Another important type of insurance is uninsured/underinsured motorist coverage. If an uninsured motorist hits you, uninsured motorist coverage will cover the cost of medical care and repairs to your vehicle. Underinsured motorist coverage will kick in if the cost of repairs and medical care exceed the driver’s insurance limits. 

Who Needs Full Coverage Auto Insurance?

Although full coverage auto insurance is not generally required by state law, it may be required by other interested parties. For example, many car loans require collision and comprehensive coverage. If you’re still paying off the loan for your car, there’s a good chance you are contractually obligated to maintain these coverage types.

Even if you don’t have a car loan, purchasing full coverage auto insurance can be the smart move. To decide what’s best for you, think about what would happen if your car was stolen or totaled.

If your car is old and not worth much, you may decide that you’d rather pay for a new car out of pocket instead of paying monthly premiums for comprehensive and collision insurance. However, if your car is newer and worth more, buying a replacement vehicle could be a major cost. In this case, it often makes sense to purchase full coverage auto insurance.

Want to learn more? Get an auto insurance quote here.

WRITTEN BY