You’ll sometimes hear the term “full coverage” applied to auto insurance, and it can mean different things to different people. Often, lenders and leasing companies will refer to “full coverage insurance” as a policy that includes both liability coverage and physical damage coverage (i.e. comprehensive and collision coverages). Others may refer to “full coverage insurance” as an insurance policy that includes all possible types of coverage. So, if someone uses the term “full coverage”, you should ask what they mean.
What kind of insurance could full coverage include?
Bodily injury and property damage liability insurance
These two coverages are required in virtually every state and are usually bundled together as a single “Liability to Others” coverage. This liability coverage may cover damages (bodily injury to others and/or damage to property owned by others) in situations where an insured person could be held legally responsible for the damage. The insurance company may compensate for the damage up to the limit of liability stated on the policy declarations page.
Personal injury protection/first party benefits
In some states – particularly those with a “no-fault” system of automobile insurance – Personal Injury Protection (PIP) coverage is offered. In other states, it might be termed First Party Benefits or a similar phrase. In general, these programs may provide coverages for one or more of the following items when related to an automobile accident:
- Medical expense
- Funeral expense
- Loss of Income
- Cost of replacement household services
Each coverage has specific requirements and limits of liability, and the nature of the coverages varies by state.
Physical damage coverage
Physical Damage Coverage typically includes two types of coverage: collision coverage and comprehensive coverage. These types of coverage are designed to repair or replace your covered vehicle after an accident. Collision coverage applies to damages sustained when a covered vehicle collides with another vehicle or inanimate object. Comprehensive coverage applies to losses caused by fire, theft, weather, animals and other similar events. Physical Damage coverages typically cover the lesser of a) the cost to repair the vehicle to its pre-loss condition; or b) the cost to replace the vehicle with one of like kind and quality at the time of the loss. Generally, these types of coverage are subject to a deductible, which is the amount of money you are responsible for paying before the insurance company covers the damage.
Medical Expense Coverage
Some form of medical expense coverage is available in most states. This coverage is used in situations where you or another insured person are injured in an accident, regardless of fault. This coverage comes in many forms, but usually consists of either primary coverage (applying to any medical expenses from the first dollar) or excess coverage (applying only to the amount not covered by medical insurance). Both types of coverage provide reimbursement of medical expenses up to the applicable limit of liability stated on the policy declarations page.
Uninsured Motorist Property Damage Coverage (“UMPD”)
UMPD is available in some states and applies to property damage caused to your vehicle by a motorist who does not have automobile insurance (“uninsured motorist”). In some states, if your policy contains both Physical Damage Coverage and UMPD Coverage, you can make the decision what coverage applies. However, you may not recover under both coverages for the same loss.
Uninsured (“UM”)/Underinsured Motorist (“UIM”) Bodily Injury Coverage
In general, these coverages apply when an insured person or occupant of a covered vehicle is injured in an accident, and the person responsible for the accident has no insurance (UM) or inadequate limits of liability (UIM) for the damages sustained. The specific application of these coverages differs dramatically from state to state. Some states required this coverage unless the insured expressly rejects the coverage in writing.
At SafeAuto, you have plenty of options within your budget that will keep you well protected. While the specifics of available coverages differ from state to state, there are several types of coverages to consider when building your policy. Get started with your free quote today at safeauto.com.