Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate drivers about...

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Reviewed by Laura Walker
Licensed Agent for 10 Years

UPDATED: Apr 9, 2019

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Though many people use the term “full coverage” to describe a range of protection for your automobile, there is actually no such thing as “full coverage” car insurance.

No single policy will protect you from every event that can possibly happen to you or your car, which is what “full coverage” implies.

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Nevertheless, it is a useful term to describe a typical situation in which an insurer takes out various types of coverage to protect against most foreseeable incidents involving an automobile.

Lenders will often speak of “full coverage” requirements for financed vehicles, and even agents will use the term as a handy way of describing a combination of coverage.

Liabilty Insurance

Normally, car insurance coverage begins with liability insurance. Liability is the portion of your coverage that protects you and your personal assets from lawsuits if you cause an accident or are sued as the result of one. Liability coverage pays for the damage to someone else’s vehicle, their medical costs, and other costs associated with an “at-fault” accident.

Most states require proof of liability insurance at a minimum in order to register a vehicle. Some states, such as Texas, do not require proof of insurance at registration, but check for it if you are pulled over or involved in an accident.

In addition to liability, you have the option of purchasing other coverage on your car. Uninsured motorist coverage pays for damage to your car and your medical bills if an uninsured driver hits you.

As many uninsured drivers do not have any personal assets to attach, most people want uninsured motorist coverage to pay for their damages.

Collision Coverage

Collision coverage pays for your car’s repairs if you are at fault in the accident and need your car repaired. Normally, your insurance will pay someone else’s damages in an accident in which you are at fault, but will not repair your car unless you have collision coverage.

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Comprehensive Insurance

Another coverage you can purchase is called comprehensive, or “comp,” insurance. Comprehensive covers all events not related to a car accident. If your car is stolen, the windshield is broken, or it is vandalized, comprehensive will pay for the damage.

If you do not have comprehensive coverage, these costs will not be covered by your “regular” policy.

When uninsured motorists, collision, and comprehensive coverage is added, this is often referred to as “full coverage,” because a wide range of possibilities is covered by your insurance policy.

Of course, this costs more than liability alone; costs for additional coverage can be significant, but are often less than the cost of paying for damages yourself.

There are other varieties of these types of coverage that can also be purchased. For example, in addition to uninsured motorists, many companies now offer “underinisured motorist” coverage. This covers you in the event that the person causing the accident does not have liability limits high enough to pay for all of the damages.

PIP, or personal injury protection, is designed specifically to pay for medical bills for you, your passengers, or someone you hit, as many medical coverage policies have smaller limits which may not cover all the medical bills.

Some companies also offer “additional reparation” benefits, which pick up payment after medical bills have been paid by other forms of insurance.

Of course, all of these types of coverage cost additional money. While you cannot avoid certain types of coverage, many people accept their agent’s proposals without question, when in fact there are things you can do to lower your insurance costs simply by declining certain policies.

For example, many people have towing insurance included as part of their insurance package. If you are a member of AAA or have towing as part of your cell phone package, you do not really need this coverage.

Some people are simply “overinsured,” which means that they have more coverage than they need. This situation might arise if you have liability limits which are very high but you have no personal assets.

The fact is, once your liability limits are exhausted, if you have nothing to liquidate, it will be difficult for someone to get money from you.

If you do have assets, on the other hand, such as a house, other vehicles, or retirement accounts, it is important to have liability limits high enough to protect these assets from lawsuits.

Review your policy carefully and discuss your coverage with your agent. It is possible that by changing deductibles or removing some forms of coverage, you may be able to save significantly on your car insurance costs.

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