Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Sep 15, 2020

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It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Here's what you need to know...

  • The goal is to be as fully covered as possible, at the best rates possible, for the most situations possible
  • Full coverage includes a number of different individual plans, including comprehensive car insurance, collision, and injury
  • If the limits in your state are low and the another person in the accident decides to sue you, you may end up forfeiting some of your present personal assets
  • PIP covers lost wages, rehabilitative services, uncovered funeral expenses, and childcare should you be unable to care for your children due to injuries you sustained during the accident.
  • Shop around for the best rates that are best for you and the coverage you need

Many people believe they have full auto insurance coverage, but do they?

Knowing what full coverage really means can be very complicated. The state says one thing, while banks and lending institutions say another. It can be very confusing; the goal in this article is to make it clear what it means to have full coverage insurance on your car.

It’s a myth that full coverage will cover you in every situation. There is not enough coverage out there to cover every possible scenario, and even if there were, it would simply be too expensive.

The goal is to be as fully covered as possible, at the best rates possible, for the most situations possible.

To find car insurance in your area, enter your ZIP into our FREE rate comparison tool above to get the best rates!

Table of Contents

What the State Says

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Some people misunderstand state liability limits minimum amount of liability coverage every driver must have on their car to protect others on the road in the event of an accident.

The important word to note here is minimum. This is the lowest level of coverage you can get away with and should never be considered full coverage.

Liability coverage consists of two parts, bodily injury, and property damage. Within these two categories are maximum amounts the insurance company will pay out in the event of an accident.

Suppose the limits on your policy look like this 20/20/25. You might wonder what these numbers mean.

  • The first number describes the maximum amount in thousands of dollars that your insurance company will pay the driver of the other car, who was injured or died as a result of an accident you caused.
  • The second number is the maximum amount that will be paid to others in the other car, who may have been injured or who may have died in the accident.
  • The third number is the maximum amount that will be paid for property damage to the other car or other physical damage incurred during the accident.

Check with your agent so see how high or how low this coverage goes. These limits protect the other party if you are in an accident that is determined to be your fault.

If the limits in your state are low and the another person in the accident decides to sue you, you may end up forfeiting some of your present personal assets. Additionally, they may be able to attach future earnings and assets.

Sometimes raising these limits can cost very little but can provide lots of extra coverage.

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What the Banks and Lease Companies Say

Banks and lease companies often refer to full coverage as having comprehensive and collision coverage on the car. Most will require this kind of coverage if you are buying or leasing a car, as it protects their investment.

Comprehensive coverage covers your car for all non-collision related damage that could happen to your car to the maximum amount of the stated policy minus the deductible.

Comprehensive policies cover damage due to severe weather such as flooding or hail, unexpectedly hitting wildlife, a crack or chip in your windshield from a flying rock, or the theft of CD’s or other electronic items from your car.

Collision coverage covers the replacement of your car, if you are found to be at-fault or if another driver is uninsured or underinsured to the amount stated in the policy less the deductible.

This is the coverage that insures that you will not be without a car if you are in an accident, no matter who is at fault.

Carrying collision coverage after your car is paid off is part of full protection coverage. Having this coverage prevents the need to have a savings account large enough to replace your car should your car be totaled or severely damaged in an accident.

Good cars are not cheap, and mechanic’s labor rates continue to rise.

Personal Injury Protection (PIP)

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No-fault insurance or personal injury protection (PIP) is mandatory in 12 states and Puerto Rico according to the Insurance Information Institute. This coverage is good to have because it doesn’t require you to pay a deductible first when you are seeking treatment for injuries.

It not only covers you but any other people who were in your car at the time of the accident and suffered injuries because of the accident.

PIP covers lost wages, rehabilitative services, uncovered funeral expenses, and childcare should you be unable to care for your children due to injuries you sustained during the accident.

The Florida Department of Motor Vehicles states that PIP coverage also covers you if:

  • You’re riding in someone else’s car that doesn’t have PIP insurance
  • You are a pedestrian and hit by a car
  • You are on your bicycle and are involved in an accident with a car

This coverage also covers any injuries your child may suffer while riding the school bus if it becomes involved in an accident with a car.

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GAP Insurance

As time goes by, more and more people are purchasing GAP insurance as part of what is considered full coverage insurance. People are financing their cars for longer periods of time.

This creates the situation where you may owe more on the car than it is worth at the time of an accident. Thebalance.com notes that some leasing companies are now requiring this type of coverage.

Having this type of coverage is of major importance when you are in an accident, and the insurance company determines through a Kelley’s Blue Book evaluation that your car is only worth a certain amount but you still owe substantially more.

GAP bridges the gap between the determined value of the car at the time of the accident and the amount still owed on the car.

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Roadside Coverage

This protection keeps you from being stranded by the road. It can be an add-on to your current policy or can be purchased separately.

This coverage can be very tricky to understand, and different companies handle this kind of coverage differently, so it’s important to read your policy and understand in advance what it covers.

Generally, roadside assistance coverage is very limited and only covers very simple things that can get you to the nearest garage or gas station.

Some policies provide a limited number of locksmith services, and the delivery of gas. While other more enhanced policies may extend their coverage to include changing a tire, installing a new battery and towing service.

With towing services, it is important to check to see how many miles of towing coverage your policy pays for.

If the number of miles is small, you may need to upgrade your coverage to be more fully covered, or you may end up with an unexpected towing bill, in spite of the fact that you purchased towing coverage with your policy.

Rental Car Coverage

Rental car coverage covers the expense of renting a car while your car is being repaired due to an accident or due to comprehensive damage. There are daily limits on this kind of coverage and a total amount for each accident.

Knowing these limits will help you choose the kind of car and the rental car company in which you wish to do business.
This kind of coverage normally does not reimburse you if your car is repaired for mechanical failure not connected to an accident. To find out the details of how and when to use this coverage is available it is best to check with your local agent.

Uninsured/Underinsured Motorist Coverage

Due to the recent economic downturn, more people are choosing to go without car insurance. This creates a greater risk that you will be involved with someone who in either uninsured or underinsured.

Automotive Fleet magazine states that, on average, one in seven motorists are uninsured.

In some states, this number is much higher.

According to the Insurance Information Institute, 21 states and the District of Columbia are requiring this kind of coverage. Uninsured/underinsured insurance makes sure you are covered even if the person who hit you isn’t.

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Medical Payments Coverage

Lastly, some people consider medical payments coverage an essential part of full coverage auto insurance. This coverage pays for your medical expenses if you are involved in an accident no matter who is at fault.

This coverage will also cover the funeral expenses if you or one of your family members dies in the accident.

The benefit of this insurance is that it does not have a deductible. It is the first insurance applied to your medical bills and may offset the cost of your health insurance deductible.

When considering this coverage, it is helpful to contact your local agent to ensure that you are not going to overlap coverage that could cost you extra money without providing any real extra service.

Being aware of the coverage options available to you will help to determine how full coverage auto insurance applies to your needs. When in doubt, consult with your car insurance specialist to make sure you have the protection you need.

To discover great rates on car insurance by entering your ZIP code into our FREE comparison tool below!