What "full coverage" doesn't include
The reason "full coverage" is such a misnomer is because it falls short of some pretty important coverages. 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. This coverage even protects you if you're struck by a car as a pedestrian.
- Uninsured/underinsured motorist coverage (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.
- Emergency road service coverage. Super handy to have if you aren't savvy with a jack and wrench. And super, SUPER handy if you're stuck on the roadside and need to be towed to an auto shop.
- Customized parts and equipment coverage. A customized part is anything that wasn't factory-installed. Think running boards on an SUV: they may've come with the car at the dealership, but they weren't installed at the factory. This coverage will help to repair or replace them.
- Rental car coverage. Much like it sounds, this helps assure you have a temporary set of wheels if your car's in the shop after a covered incident.
- Gap coverage (or auto loan/lease coverage). Let's say you're in an accident and your car's a total loss. Your insurance company values it at $20,000 but you still owe $25,000 on your loan. Your comprehensive or collision would pay its $20,000 value, minus your deductible. Loan/lease gap coverage would then cover the extra $5,000 you need to pay off your lender, minus your deductible. Without it, you may have to pay close to $5,000 out of pocket. Ouch.
How much does it cost to have "full coverage"?
Auto insurance rates are based on a bunch of factors. Your driving history. Collision frequency in your area. Your car's make and model. How often you drive. And so much more.
That's why it's difficult to whittle down a be-all end-all price for car insurance.
However, a study from the National Association of Insurance Commissioners breaks down the average price per year on liability, collision, and comprehensive from 2012-2016.
In 2016, the average price for liability insurance was around $567. And the average cost of liability + comp and collision that same year was roughly $936. That comes out to $78 a month for "full coverage." Not bad.
Do I need "full coverage" on a used car?
If you're financing or leasing a used car, your lender will likely require what they describe as "full coverage". But whether you're financing or not, liability, comp, and collision are good to have.
There are some cases with older cars when comp and collision aren't always necessary. A new car depreciates pretty much the moment you drive it off the showroom floor. So if you have an older car that's value has greatly depreciated, "full coverage" (plus your deductible) may not be worth it for you. Insurers likely wouldn't offer comprehensive and collision in this situation, anyway.
Is it worth it to have "full coverage"?
Of course. But just keep in mind that what's known as "full coverage" doesn't cover everything. The general rule of thumb is to buy as much coverage as you can comfortably afford.
However, when it comes to ANY coverage there's no one-size-fits-all approach. Sometimes the best way to figure out what you need is by shopping around.
Get a quote. Find coverages fit for you.
If you're still shopping, get free quotes from different insurers. Online quoting systems often help pin-point coverages you might want to consider.
And why not start here? Get a quick, free car insurance quote from Esurance. We'll help you narrow down coverages relevant to you. That way you're not paying for those you don't even need. It's just one more way we're making insurance surprisingly painless.