Home » Insurance » Auto Insurance » Basic Full Coverage Auto Insurance

Basic Full Coverage Auto Insurance: What Are the Pros and Cons

Updated: December 12, 2018

Whenever someone is looking for cheap auto insurance, they often run into people or online sources who mention full coverage auto insurance as an option.

The words “full coverage auto insurance”, however, are sometimes misleading because there is no such thing as complete coverage.

In simple terms, full coverage auto insurance applies to any policy that includes both comprehensive and collision insurance coverage.

It is crucial that customers look at their situation closely before they make a decision regarding the type of insurance they need.

There are certainly advantages to having “full coverage auto insurance,” but it is not always necessary.

What is Full Coverage Auto Insurance?

Full coverage auto insurance gives the misleading impression that everything related to a car accident is covered by this policy.

If a customer asks an insurance company for their “full coverage auto insurance” policies, they are immediately referred to plans with both comprehensive and collision coverage.

In fact, the words mean something a little different. Full coverage auto insurance does not offer complete protection to the individual in an accident or to their vehicle.

The idea behind full coverage auto insurance is to ensure that both collision and comprehensive coverage is included, along with any liability coverage that is legally mandated by the state.

If a customer asks an insurance company for their “full coverage auto insurance” policies, they are immediately referred to plans with both comprehensive and collision coverage. However, the amount of each coverage, along with any additional coverages, may vary depending on the type of cheap auto insurance policy is on offer.

It is best to talk with an insurance agent in detail about what is included in their full coverage policy. This gives a customer a much better idea about the options available for insuring their vehicle at a reasonable price.

What is Missing from Full Coverage Auto Insurance Plans?

Even though these plans are touted as being “complete,” they do not include a number of elements a customer may want in their insurance policy. For example, full coverage auto insurance does not necessarily include uninsured motorist coverage, medical coverage or PIP coverage. These are only present in all full coverage plans if the respective state makes them mandatory.

This type of auto insurance does not include any roadside assistance coverage, unless specifically requested by the customer.

Some full coverage policies have optional death benefits, but only in particular states. Reimbursement or insurance for rental vehicles is also not included by default. For customers who rent cars on a regular basis, they may want to ask about having this included in their full coverage policy.

This type of auto insurance does not include any roadside assistance coverage, unless specifically requested by the customer.

Custom part coverage is also not present in these insurance policies.

Not all full coverage policies are equal. If one policy is less expensive than the other, it may not include any additional coverage beyond the required minimums. Customers must think carefully about the risk vs. reward of getting a more fleshed out full coverage auto insurance plan.

Advantages of a Full Coverage Auto Insurance Policy:

By having both collision and comprehensive coverage, customers can drive their vehicle with the peace of mind that an accident will not result in major financial hardship.

Comprehensive coverage ensures that any damage to the car that occurs while it is not on the road is covered by the policy.

While state mandated liability coverage pays for damages that are not the insured party’s fault, they do not apply to accidents or damage caused by the insured party. This is where comprehensive and collision coverage help a great deal.

With collision coverage, the insured is protected if they hit a car or other nonliving object.

Comprehensive coverage ensures that any damage to the car that occurs while it is not on the road is covered by the policy. For example, a car may get stolen, vandalized or damaged through a natural disaster. In each of these cases, comprehensive coverage protects the insured individual.

Full coverage auto insurance also results protection for any belongings that are stolen from a vehicle. For example, someone breaks into a car and steals a laptop worth thousands of dollars. With full coverage, the insurance company covers the market value of the stolen item(s).

Disadvantages of a Full Coverage Auto Insurance Policy:

There is no doubt that getting full coverage auto insurance is more expensive than other policies. For people who want to save money, cheap auto insurance is often the way to go. They simply get the minimum liability coverage required by the state, which ensures they can legally take their vehicle on the road.

For a full coverage auto insurance policy, the deductible refers to money the insured must pay out of pocket in the event of an accident or damage to their vehicle.

Aside from higher premiums, customers must also consider the deductible in their insurance policy. For a full coverage auto insurance policy, the deductible refers to money the insured must pay out of pocket in the event of an accident or damage to their vehicle.

For example, a policy with a deductible of $500 means that each time there is an accident, the insured pays $500 towards the damage costs before the insurance company takes care of the rest.

Sometimes the cost of the policy, in addition to the deductible, mean that the full coverage policy is not prudent for a customer.

In fact, they may be spending a lot of money to insure a vehicle that is not worth that type of investment.

When to Avoid Full Coverage Auto Insurance?

When looking at full coverage auto insurance quotes, customers must consider the value of their car. Even the most basic full coverage auto insurance will come with a significant premium and deductible.

Even individuals with old cars should only drop full coverage if they have the finances to buy a new car.

If the insured individual’s car is only worth $1000 or $2000, and they have the money to buy a new vehicle in the coming months, full coverage does not make sense.

In this event, it is better to take out a minimum cheap auto insurance policy that only has liability coverage. If an accident does significant damage to the vehicle, the customer can simply spend their money on a new car.

However, it is very important to carefully calculate the potential upsides and downsides of full coverage auto insurance. Even individuals with old cars should only drop full coverage if they have the finances to buy a new car.

For example, a customer might decide to drop full coverage because their car is only worth $1500. However, they do not have the savings to buy a new car. If they get into a major accident, they no longer have insurance protection to get the old car fixed.