Full coverage sounds good ... no, amazing. But it isn't actually all that. In fact, "full coverage" isn't actually a coverage you can choose. We'll explain.
What does the term "full coverage" refer to?
"Full coverage" is a short-hand phrase that's sometimes used to describe a policy that includes comprehensive, collision, and liability coverages. But truth be told, it isn't an actual coverage. It's a term that may have originated with finance companies as a way to quickly explain the combination of coverages you'd need to finance or lease a car.
What's considered "full coverage car insurance"?
So, when you hear the term "full coverage car insurance" it typically means a policy that includes:
Liability insurance. If you're found at fault for an accident, liability insurance helps pay the expenses of the "other guy". In other words, it protects you financially if you injure the other guy or damage his car.
Comprehensive coverage. This covers your car for the stuff that's not a "collision". Like if it's stolen. Or catches on fire. Or a tree falls on it. The crazy stuff that you never expect to happen ... but does.
Collision coverage. This covers your car for collisions. Like you rear-end someone, slide into a tree, or run into a fence.
To sum it up, the term "full coverage" = liability + comprehensive + collision. And those coverages are a good start, but it leaves out some other important ones. Let's talk about them.
What "full coverage" doesn't include
Contrary to the way it sounds, full coverage doesn't actually protect everything. To ensure you have the protection you need, there are a few other coverages you may want to consider. Things like:
Medical payments coverage. This is designed to pay medical bills for you and the passengers in your car if you're injured in an accident. It doesn't matter whether or not you're at fault for the accident.
Uninsured/underinsured motorist coverages (UM/UIM). These coverages are designed to protect you and your car if someone hits you and either doesn't have insurance or enough insurance to cover the costs.
Custom parts and equipment coverage. This protects after-market upgrades to your car. Say you opted for a fancy sound system. Or a custom grill and an after-market exhaust system. Your standard collision and comprehensive coverages may not cover the bell and whistles that weren't factory-installed. But if you add custom parts and equipment coverage, you'll be protected if anything damages your upgrades.
Rental car coverage. This helps assure you have a temporary set of wheels if your car's in the shop after a covered incident.
Loan/lease gap coverage. If your car's leased or financed and it's totaled after an accident, this coverage can help cover the remaining balance you may owe on your loan or lease (up to an increase of 25% of your car's actual cash value).
Emergency roadside assistance coverage (aka towing and labor coverage). This coverage is there to help when you're stranded. Broken down? We'll tow you. Blown tire? We'll put your spare on. Ran out of gas? We'll bring you some. Emergency roadside assistance covers up to $75 per incident to help you get rolling again.
Do I need "full coverage"?
Short answer? If your car is leased or financed, yes. Your lender will probably require that you have both comprehensive and collision coverages in addition to the liability coverages that're required in most states.
If your car's paid off, the decision's yours. You could go without comprehensive and/or collision coverages, but you should think about whether you can afford to repair or replace your car in the event of a crash. How much financial risk are you willing to take? Can you afford to repair or replace your car if something happens? If not, think about adding these coverages to your policy.
When it comes to ANY coverage, there's no one-size-fits-all approach.
Find coverages fit for you
Honestly, not having the right coverage can be painful if, and when, something does go wrong. That's why it's so important to understand exactly which coverages are right for you.
Coverage Counselor® from Esurance makes that simple. It's an online tool that explains coverages for you to consider in words that make sense. No confusing gobbledy gook. So you can feel confident about getting the protection that's right for you. Whether you're an Esurance customer or not.
Get a quick, free car insurance quote from Esurance to see how we're making insurance simple, transparent, and affordable. In other words ... surprisingly painless.