Full Car Insurance Coverage: Pros and Cons

Full car insurance coverage includes multiple policies beyond the basic liability coverage required by state law. The pros and cons of full car insurance coverage are that, while collision, comprehensive, uninsured motorist, medical payments coverage, and more can protect you in the event of an accident, it will also raise your insurance rates. You may not want or need that much coverage, so shop around to get free full auto insurance coverage quotes and see if this coverage is in your budget. Start now with our free comparison tool below.

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

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Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Oct 31, 2020

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In an effort to make ends meet, many people try to find wiggle room in their budgets by cutting back on certain services, including full car insurance coverage, opting instead for the minimum amount they can get while still being legal. With full car insurance coverage, there are pros and cons, such as price versus peace of mind.

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There are many reasons you might choose state minimum insurance coverage, especially if you do not drive much. For some people, it is fine, but others may be playing a dangerous game of road roulette that could cause them to lose their shirts. Read on for pros and cons of full insurance coverage to help you make an informed decision about the right choice for you.

Definition of Full Car Insurance Coverage

Let’s face it. There is no car insurance policy that will cover every conceivable circumstance. Nevertheless, you can choose every kind of coverage your insurance company offers and that is perhaps the best definition of full car insurance coverage.

It could be said that car insurance is like life because you hope for the best but try to be prepared for the worst. Since Murphy’s Law states, “anything that can go wrong, will go wrong,” you might be best served by covering as many possibilities as you can when selecting the coverage in your car insurance policy.

One of your choices is property damage liability, which will protect you if someone else’s possessions are damaged or destroyed by your car in the event of an accident. There are various levels of this liability so you may select a little or a lot of coverage for your policy.

In addition to protection from damage to others, you should also have security for your own body and property. You can get this with collision insurance, which covers your car if you are ever involved in a crash.

However, there are many more things that can happen to and in your vehicle not covered by a collision, so comprehensive insurance is available to encompass them. This coverage handles others aspects, such as burglary, defacement, and windshield damage.

You can also get underinsured and uninsured driver coverage. These help to protect you if another driver is at fault for an accident but that person has either no insurance or not enough insurance to pay for your injuries or the damages to your property.

According to studies done by the Insurance Research Council, approximately one driver out of every seven does not have insurance.

Medical payments coverage is another option you can add to your car insurance policy. It helps to pay for any prescriptions, hospital bills, therapy or medical procedures required if you or a family member is injured in an accident. This could also be used if you needed to pay for burial expenses as a consequence of an accident. Protection is extended to loved ones who are injured while traveling in someone else’s vehicle as well.

There is also economical loss coverage, which comes in handy if you are unable to work after an accident. This kind of protection can be especially beneficial if you are the head of the household or if you have a job that requires a lot of physical activity. In these instances, even a brief interruption in pay or a minor injury can be devastating so it is best to be covered.

Mechanical breakdown coverage is another type of protection you can add to your insurance policy. In essence, it covers the little things, like brake pads and spark plugs that can cause your automobile to stop working properly with or without an accident. Towing and labor, also referred to as roadside assistance, could also be important coverage to include in your insurance policy.

Another beneficial choice is Guaranteed Asset Protection or lease payoff coverage, commonly called GAP protection. It is designed for people who have leased their vehicle, a very popular option today, to pay the difference between the amount left on the loan and the current cost of the automobile if it is lost or totaled.

You can purchase this coverage from an insurance company or directly from the car dealership. Without it, you will most likely still be held responsible for paying off the loan, even if you don’t have the car anymore. To find out how much your vehicle is worth right now, you can check the Kelly Blue Book website.

Additional car insurance coverage is available for those who “pimp their rides” or, in other words, add extra equipment and augmentation that did not come from the car’s manufacturer in order to enhance the vehicle’s look and operation.

Items that fall into this category include special tires, custom paint jobs, and elite speaker systems. Car insurance companies typically do not pay claims for these options unless you have this protection.

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You May Not Need Every Option in the Full Coverage Package

Some aspects of your car insurance policy may cancel out others or make them less helpful, so it becomes really important to sweat the small stuff when it comes to finding out what you are actually paying for. Learning how one type of protection affects another is a key to getting the most for your money.

For instance, if you purchase protection to cover collision and uninsured drivers, in the event of an accident, you could be limited to collecting only the quantity of your collision deductable. This means that although you pay for uninsured motorist protection, you would not receive any additional funds from that to help cover your damages and could still end up reaching into your wallet to make everything right.

Most drivers will find that simply having collision coverage is enough to pay for damages in a crash, but it will also raise your insurance payments significantly. Information and statistics on car accidents can be found from the National Highway Traffic Safety Administration website.

State Minimum Car Insurance Coverage

You must carry insurance if you are driving a vehicle on the roads. Although this is true for every state in the country, how much coverage you need varies and depends on where you live.

In many states, at a minimum, your policy has to have property damage and bodily injury liability.

This means you are covered if someone is hurt or belongings are broken as the result of a car accident. Some states also require you to have uninsured driver and personal injury coverage as part of a minimum policy.

Disadvantages of Minimum Coverage

For those who are trying to save money or trim their budgets, the bare minimum coverage option looks very appealing. In fact, many people have gotten by for years on just that.

However, a majority of the public is unaware that minimum coverage does nothing to protect you, the policyholder, in the event of an accident. The purpose of the property damage and personal injury protection is to keep you from being liable to the other guy for his pain or loss. If you experience an injury or damage and it is your fault, you will typically not be compensated.

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Understanding Car Insurance Coverage

It could help to know more about that car insurance policy and what you are actually paying for in each billing cycle. A clear understanding will help you to better manage your finances and perhaps even demonstrate a need to budget for the unexpected.

The conditions for every policy are explained within the contract. They can be found in the section that details the issues that will be your responsibility and which ones will be covered by your insurance company.

When you have an accident or damage, you make a claim to your insurance company. This is simply a request that they pay for the cost of the problem or issue. An adjuster is the person who decides how much the company has to pay.

We always hear and read about deductibles but most of us don’t give it much thought until it becomes necessary. In simple terms, a deductible is the amount you have to pay before your insurance company kicks in to pay the rest. A low deductible means higher insurance premiums.

The more you know about the various terms and phrases in your insurance contract, the less likely it will be that you encounter surprises later on.

Situations Not Typically Protected Even with Full Car Insurance Coverage

Unfortunately, many of us will encounter a situation that your car insurance does not cover. This not only may cause you to pay hundreds or thousands of dollars out of pocket, but can also leave you feeling betrayed and confused. After all, you spend years making car insurance payments for the sole purpose of having protection if your vehicle is damaged or destroyed, so it is shocking when this does not occur.

With so many different options and scenarios that you can imagine and get protection for, it may seem like you have all the bases covered in your full car insurance policy. However, there is still an occurrence or two that can slip through the cracks.

For example, most people are not aware that hit-and-run accidents are usually not covered by any car insurance policy. In addition, many full car insurance policies do not cover theft of items within the vehicle. Theft protection usually refers to the entire car being stolen, not the things inside, such as computers or gifts.

Your best protection is always knowledge. Take the time to fully review your auto insurance policy with your agent. It will be time well spent.

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