What is Full Coverage Car Insurance and What Does it Cover?

By the Mercury Team

Full coverage auto insurance helps financially protect you if a covered loss involving your vehicle occurs. It can provide more extensive coverage for multiple types of losses, which can be a wise investment to protect your vehicle — especially if you recently bought or leased it — and other assets in the event of a collision. Let’s dive deeper into this type of coverage and why it may benefit you.

What Is “Full Coverage” Car Insurance?

Full coverage auto insurance helps financially protect you if a covered loss involving your vehicle occurs. Full coverage isn’t a specific type of policy but is usually a combination of required and optional coverages — i.e., liability coverage insurance with collision and comprehensive coverage.

What Does Full Coverage Car Insurance Cover?

It depends on what your insurer provides, but generally, full coverage car insurance will include the following:

Collision Protection

Collision protection pays for repairs to your vehicle, less the amount of your deductible, in the event of a collision and is typically optional, though a car lease or loan may require it.

Comprehensive Auto Insurance

Comprehensive auto insurance covers repair costs from events beyond your control, such as a tree branch falling on your vehicle, theft, or vandalism. This is also typically optional but may be required in a car lease or loan terms.

Liability Coverage

Liability coverage is separated into two categories:

• Property damage liability: Covers damages the insured person is legally obligated to pay, including repairing the other party’s vehicle and other property damage to objects like buildings, fences, and signal lights.
• Bodily injury liability: If you cause an accident and someone else is injured, this coverage helps pay for those damages, including medical expenses, lost wages, legal fees, and pain and suffering.

Personal injury protection insurance

Personal injury protection insurance helps pay for your medical costs following a car collision. It may also cover additional expenses such as lost income or household services you can’t perform due to your injury, such as child or senior care.

Medical Payments insurance

Medical payments insurance helps to cover medical expenses arising from a covered collision, regardless of who’s at fault. Medical payments and personal injury protection overlap in coverage, but the main difference is that personal injury protection pays for lost wages or essential services if you’re unemployed due to your injury.

Uninsured/Underinsured Motorist Coverage

• Uninsured motorist bodily injury: Pays for reasonable medical expenses, pain and suffering, and loss of earnings for injuries to the driver and passengers that result from the accident.
• Uninsured motorist property damage: Pays for repairs to your car when an uninsured motorist causes the loss. In many cases, uninsured motorist property damage is limited, so purchasing collision coverage ensures your car is fully repaired or replaced due to serious damage.
• Underinsured motorist bodily injury: Helps pay medical expenses for you and your passengers if a driver with insurance hits you, but not enough to cover the full cost.
• Underinsured motorist property damage: Helps pay to repair your vehicle if a driver with insurance hits you, but not enough to cover the full cost.

Common Car Insurance Coverages at a Glance

When it comes to full coverage auto insurance, it’s important to know that there are car insurance requirements by state. Here’s a quick glance at which coverages are required and optional.

• Liability coverage — Required
• Comprehensive coverage — Optional (typically required if you lease or finance a vehicle)
• Collision coverage — Optional (typically required if you lease or finance a vehicle)
• Medical payments — Required in some states
• Personal injury protection — Required in some states
• Uninsured/underinsured motorist coverage — Required in some states

How Can I Customize My Car Insurance Policy to Best Meet My Needs?

When it comes to customizing a car insurance policy, consider these tips:

• Evaluate your coverage needs: Consider factors such as your driving habits, the value of your vehicle, and the level of risk you are comfortable with.
• Assess coverage limits: Evaluate your financial situation and potential risks to determine the appropriate coverage limits. Higher coverage limits typically result in higher premiums but offer increased protection in the event of a claim.
• Consider deductibles: An insurance deductible is the amount you’re responsible for paying before your insurer covers the rest. By choosing higher deductibles, you can lower your premium costs. However, select a deductible that you can comfortably pay out of pocket in the event of a claim.

Do I Need “Full Coverage” Car Insurance?

While it’s not required to have full coverage car insurance, there are some situations where it would be beneficial to have this coverage:

• New or leased vehicles: If you have a new or leased vehicle, full coverage can help to protect your investment.
• High-value vehicles: If you own a luxury or high-value vehicle, the cost of repairs or replacement can be substantial, making full coverage a wise choice.
• Risky driving conditions: If you live in an area prone to severe weather, have a high crime rate, or frequently park your car on the street, comprehensive coverage can provide peace of mind.

Conclusion

While full coverage car insurance offers comprehensive protection, purchasing it should be based on individual circumstances, including your vehicle’s value, financial situation, and risk tolerance. Whether you get full or more basic coverage, Mercury can create an affordable auto insurance policy that fits your needs.

Contact us today for a fast, free quote!