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Ever heard of full coverage auto insurance and weren’t sure exactly what that means? Full coverage insurance is just a common term for a bundle of coverages (usually liability, collision, and comprehensive) that can offer you broader protection. “This extensive coverage for multiple types of losses can be a good investment, especially if you’ve recently purchased a car or you’re leasing,” says Justin Yoshizawa, Sr. Director, Product Management. “It helps protect not just your vehicle, but your finances if the unexpected happens.” Here’s a bit more about how full coverage insurance works and why it could potentially benefit you.
What Is Not Covered by Full Coverage Insurance?
Despite its name, full coverage insurance doesn’t cover all scenarios. For instance, full coverage won’t pay for routine maintenance or a timing belt replacement. Your insurance coverage amounts are capped by your policy limits, and you’ll usually need to pay a deductible out of pocket before insurance kicks in for comprehensive or collision claims. Check your policy for a full list of exclusions before assuming every loss is covered.
When Might You Consider Dropping Full Coverage?
You might want to reassess whether full coverage still makes sense as your vehicle ages and its value declines. If the cost of comprehensive and collision coverage is close to your car's value, it may not be cost-effective to keep them. You may also choose to drop these coverages if you could reasonably afford to repair or replace the vehicle yourself.
How Much Full Coverage Car Insurance Do You Need?
The right amount of coverage depends on your driving habits, the value of your vehicle, and the level of risk you are comfortable with. Consider:
- Liability limits: Higher coverage limits can offer more financial protection if you’re at fault in a serious accident.
- Deductibles: Choosing a higher deductible can lower your premium, but increases out-of-pocket costs if you file a claim.
- Vehicle value: Newer or more expensive cars may justify higher levels of protection.
- Personal finances: Your ability to cover unexpected expenses can influence how much coverage you carry.
How to Check Whether You Have Full Coverage
Review your insurance policy’s declarations page to see if you have full coverage insurance. Look for listed coverages such as liability, comprehensive, and collision. If you’re unsure, reach out to your agent.
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.
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What Does Full Coverage Insurance Cover?
Full coverage car insurance usually combines three main types of protection:
Step 1: Liability Coverage
Liability coverage helps address bodily injuries or property damage in an at-fault accident. This may include medical expenses, lost wages, vehicle repairs, damage to fences or buildings, and legal costs if you’re sued. Most states require drivers to carry minimum liability limits, but those limits may not be enough in a serious accident.
Step 2: Comprehensive Coverage
Comprehensive auto insurance covers repair costs from non-collision events beyond your control, such as theft, vandalism, fire, falling objects, animal damage, and weather-related incidents like hail or flooding. Comprehensive coverage is typically optional but may be required in a car lease or loan terms.
Step 3: Collision Coverage
Collision protection helps pay to repair or replace your vehicle after an accident, regardless of who is at fault, minus your deductible. This includes collisions with other vehicles as well as single-car accidents, such as hitting a guardrail or pothole. Collision is usually optional as well, but your car lease or loan may require it.
When Should You Get 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:
Step 1: New or Leased Vehicles
If you have a new or leased vehicle, full coverage car insurance can help protect your investment. Most lenders and leasing companies require collision and comprehensive coverage until the loan is paid off or the lease ends. Even if it isn't required, repairing or replacing a newer vehicle can be expensive, and full coverage insurance can help reduce the financial burden after a covered accident, theft, or weather-related damage.
Step 2: High-Value Vehicles
If you own a luxury, specialty, or high-value vehicle, the cost of repairs or replacement can be significantly higher than for a standard car. Full coverage insurance can help protect you from large out-of-pocket expenses if your vehicle is damaged or declared a total loss after a covered event.
Step 3: Risky Driving Conditions
If you live in an area prone to severe weather, experience high rates of vehicle theft or vandalism, or regularly park your car on the street, comprehensive coverage can provide added protection. It can help pay for damage caused by events such as hail, flooding, falling objects, fire, theft, or vandalism.
Frequently Asked Questions
Is full coverage car insurance required by law?
No, full coverage is not required by law. In fact, most states require only liability insurance. However, if you lease or finance your car, your lender or leasing company may require you to carry comprehensive and collision coverage.
Does full coverage pay off your car loan?
Not necessarily. If your car is totaled, your insurer will typically pay the vehicle’s current market value, not the remaining balance on your loan. If you owe more than the car is worth, you may still be responsible for the difference unless you have gap insurance.
Does full coverage include roadside assistance?
Roadside assistance is usually optional and not automatically included in full coverage insurance. If you want services like towing, jump-starts, or flat tire assistance, you’ll likely need to add this coverage separately.
Justin Yoshizawa is Director of Product Management for Mercury Insurance, overseeing California’s personal lines, including auto, homeowners, landlord, and umbrella. He has led major initiatives such as the rollout of the aligned umbrella product across all Mercury territories and serves as a company spokesperson on auto-related topics. Yoshizawa holds dual Bachelor of Science degrees in Applied Mathematics and Applied Statistics from UC Santa Barbara.
The Mercury Marketing Team is made up of professionals in the fields of Content Creation, Public Relations, Social Media and Journalism. The team works together to deliver professionally written and researched content to provide information for consumers.