What Does Full Coverage Insurance Cover?

“Full coverage” is a commonly used phrase in auto insurance, though it is not a single, official policy type. Instead, it describes a policy combining distinct coverages for broad financial protection. It covers damages to other parties, the policyholder’s vehicle, and often includes additional protections. The specific components can vary based on the insurer, individual needs, and requirements from lenders or state regulations.

Understanding Liability Coverage

Liability coverage is a fundamental part of any comprehensive auto insurance plan and is legally mandated in most states. This protection addresses financial responsibility when you are at fault for an accident, covering damages and injuries sustained by other people, not yourself or your own vehicle. It is generally divided into two main categories: bodily injury liability and property damage liability.

Bodily Injury Liability

Bodily injury liability covers costs associated with injuries or death to others for which you are responsible in an accident. This can include medical expenses, hospital care, rehabilitation, and lost wages for injured parties. It may also help cover legal fees if a lawsuit arises. Limits are often expressed as two numbers, such as $25,000/$50,000, representing the maximum payout per person and per accident.

Property Damage Liability

Property damage liability addresses damage you cause to other people’s property in an at-fault accident. This typically includes repairs to another vehicle, but can also extend to other structures like fences, mailboxes, or buildings. Like bodily injury liability, it has a set limit; if damage costs exceed it, the policyholder is responsible for the difference. Most states require a minimum, but higher limits offer greater financial protection.

Understanding Physical Damage Coverage

Physical damage coverage protects your own vehicle from various types of damage. This category typically includes two primary types of protection: collision coverage and comprehensive coverage. Both usually come with a deductible, the amount you pay out-of-pocket before insurance covers remaining costs.

Collision Coverage

Collision coverage helps pay for repairs or replacement of your vehicle if damaged in an accident involving another vehicle or object, regardless of fault. This includes hitting another car, a tree, a guardrail, or a single-car rollover. While not legally required, it is often required for car loans or leases, as lenders protect their investment. Deductibles commonly range from $250 to $1,000, influencing the premium cost.

Comprehensive Coverage

Comprehensive coverage protects your vehicle from damage not involving a collision. This includes incidents such as theft, vandalism, fire, natural disasters (floods, hail), falling objects, or hitting an animal. Like collision coverage, it usually has a deductible. It is valuable for newer vehicles or those with outstanding loans, covering a broad range of unforeseen circumstances.

Commonly Added Protections

Beyond core liability and physical damage coverages, several other protections are frequently included in or recommended alongside a “full coverage” policy. These additions enhance the financial safety net for policyholders and their passengers.

Uninsured/Underinsured Motorist (UM/UIM) coverage

Uninsured/Underinsured Motorist (UM/UIM) coverage protects you if involved in an accident with a driver who has no insurance or insufficient insurance to cover your damages. UM/UIM can help pay for your medical expenses, lost wages, and sometimes property damage, depending on the policy and state regulations. This coverage is mandatory in many states and protects against financial risks from drivers without adequate liability insurance.

Medical Payments (MedPay) or Personal Injury Protection (PIP)

Medical Payments (MedPay) or Personal Injury Protection (PIP) help pay for medical expenses for you and your passengers, regardless of fault. MedPay typically covers medical and funeral expenses. PIP is more extensive, often covering medical costs, lost wages, and other related services, and is more common in “no-fault” insurance states. These coverages provide immediate funds for injury treatment, reducing reliance on health insurance or the at-fault driver’s liability coverage.

What Full Coverage Does Not Include

Despite its name, “full coverage” does not mean protection against every possible automotive-related financial loss. Specific situations and types of damage are typically not covered by a standard “full coverage” policy, requiring additional, optional coverages.

Rental car reimbursement is an optional add-on that covers the cost of a rental vehicle while your car is being repaired after a covered claim. Without it, you are responsible for the rental car cost during repair. Similarly, roadside assistance is a separate optional add-on that provides services like towing, jump-starts, tire changes, or fuel delivery. It is not part of standard collision or comprehensive coverage.

Gap insurance, or Guaranteed Asset Protection, is another optional coverage for leased or financed vehicles. If your vehicle is totaled or stolen, collision and comprehensive coverages pay its actual cash value, which may be less than the amount owed on your loan or lease due to depreciation. Gap insurance covers this “gap” between the vehicle’s actual cash value and the remaining loan balance, preventing you from owing money on a car you no longer possess.

Routine maintenance, mechanical breakdowns, or damage from wear and tear are not covered by auto insurance. Auto insurance is for unexpected events and accidents, not vehicle upkeep or mechanical failures. Costs for oil changes, tire rotations, engine repairs due to normal use, or other common maintenance items are the vehicle owner’s sole responsibility. Personal items stolen from inside your car are typically covered by a homeowner’s or renter’s insurance policy, not auto insurance.