What Is Full Auto Coverage and What Does It Include?

“Full auto coverage” is a common term describing a comprehensive suite of auto insurance coverages. It offers extensive protection against financial risks associated with vehicle ownership and driving, typically exceeding minimum liability coverage mandated by state laws. This understanding helps consumers make informed decisions about protecting themselves, their vehicles, and their financial well-being.

Understanding Core Coverage Components

A “full coverage” auto insurance plan typically includes several foundational components. Each is designed to address different types of risks and together they provide broad financial protection.

Collision coverage

Collision coverage covers damage to your vehicle from an accident with another vehicle or object, regardless of fault. It also covers single-car accidents like rollovers. Lenders often require it for financed or leased vehicles. It pays for repairs or replacement up to your car’s actual cash value, minus your deductible.

Comprehensive coverage

Comprehensive coverage, sometimes called “other than collision” coverage, pays for damage to your vehicle from events not involving a collision. This includes theft, vandalism, fire, natural disasters, falling objects, and hitting an animal. Lenders also often require it for financed or leased vehicles. It covers repair or replacement costs up to your vehicle’s actual cash value after your deductible.

Bodily injury liability coverage

Bodily injury liability coverage pays for medical expenses and lost wages for others if you are at fault in an accident. It also covers legal fees if you are sued. This coverage does not pay for your own injuries or those of your passengers; separate coverages like Personal Injury Protection or Medical Payments are needed for that. Most states require this coverage.

Property damage liability coverage

Property damage liability coverage pays for damage you cause to another person’s property if you are at fault in an accident. This includes damage to other vehicles, buildings, or public property. Like bodily injury liability, it is required in most states. If the cost of damages exceeds your chosen coverage limit, you may be personally responsible for the difference.

Uninsured/underinsured motorist (UM/UIM) coverage

Uninsured/underinsured motorist (UM/UIM) coverage protects you if you are in an accident with a driver who has no insurance (uninsured) or not enough insurance (underinsured) to cover your damages and injuries. It pays for your medical expenses, lost wages, and pain and suffering. Some states require UM/UIM coverage, while in others it is optional but highly recommended.

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

Personal Injury Protection (PIP) or Medical Payments (MedPay) coverage covers medical expenses for you and your passengers, regardless of fault. PIP is generally more comprehensive, covering medical bills, lost wages, and essential services if you or your passengers are injured. MedPay typically covers medical bills specifically, up to a certain limit. Availability and requirements for PIP and MedPay vary by state.

Exploring Additional Protection Options

Beyond the core components, several optional coverages can enhance a policyholder’s financial protection, providing an even broader safety net.

Rental car reimbursement coverage

Rental car reimbursement coverage pays for a rental car while your vehicle is being repaired after a covered incident. It typically has daily limits and a maximum number of days. It applies only when your vehicle is undergoing repairs due to a covered claim, not for routine maintenance or vacation rentals.

Roadside assistance

Roadside assistance provides services like towing, jump-starts, or tire changes if your vehicle breaks down. This add-on offers convenience and reduces out-of-pocket costs during unexpected vehicle issues.

Gap insurance

Gap insurance, or Guaranteed Asset Protection, covers the difference between what you owe on a car loan or lease and the vehicle’s actual cash value if it is totaled or stolen. Since new cars depreciate quickly, their market value can fall below the loan balance. Gap insurance prevents you from owing money on a vehicle you no longer possess.

New car replacement coverage

New car replacement coverage pays to replace a totaled new car with a brand-new one of the same make and model, rather than just its depreciated actual cash value. This is valuable for new vehicles, which can lose significant value quickly. Eligibility often requires the vehicle to be relatively new, within the first few years of ownership and under a certain mileage.

What Is Not Included

Despite the comprehensive nature implied by “full auto coverage,” certain situations and types of damage are typically excluded, requiring separate policies or different financial arrangements.

Normal wear and tear

Standard auto insurance, even with comprehensive and collision, does not cover normal wear and tear, mechanical breakdowns, or routine maintenance issues. These are considered costs of vehicle ownership, not sudden, unforeseen events.

Damage from intentional acts

Damage from intentional acts, such as deliberately damaging your own vehicle or engaging in illegal activities, is generally not covered. Policies protect against accidental losses, not self-inflicted harm or criminal behavior. For instance, while liability coverage may pay for damages to others in a DUI accident, coverage for your own vehicle or injuries could be denied.

Personal belongings stolen from your car

Personal belongings stolen from your car are typically not covered by auto insurance. These items are usually covered by a homeowner’s or renter’s insurance policy. While damage to your car from a break-in might be covered by comprehensive insurance, the stolen items themselves are not.

Using your vehicle for commercial purposes

Using your vehicle for commercial purposes is usually excluded from standard personal auto insurance policies unless additional commercial coverage is added. Personal policies are for private use; business activities require specialized insurance. Without proper endorsement, a claim from commercial use could be denied.

Custom parts and modifications

Custom parts and modifications are often not fully covered by a standard policy unless added as extra coverage. The policy typically covers factory-installed components. Aftermarket additions may require separate coverage to protect their value.