What full-coverage car insurance covers
Full coverage typically includes liability insurance to pay for expenses related to other drivers, their cars, and their passengers. Collision and comprehensive coverages are also included and cover your vehicle.
Full-coverage policies can vary based on your insurer, so it’s best to check with an insurance agent if you’re confused about what your insurance covers. The table below shows the major differences between the most common types of auto insurance.
| Coverage Type | What It Covers | Is It Required? | Who It’s Good For |
|---|
| Bodily injury liability | After an at-fault accident, this policy pays for the other driver’s medical expenses if they get injured. | Yes, in most states | All drivers |
|---|
| Property damage liability | After an at-fault accident, this policy pays for the other driver’s vehicle repairs. | Yes, in most states | All drivers |
|---|
| Uninsured/underinsured motorist | This policy provides extra coverage for your losses if you get into an accident with an uninsured motorist or a driver with limited insurance coverage. | Yes, in some states | All drivers |
|---|
| Medical payments | Pays for your and your passengers’ medical bills after a collision, no matter which driver was at fault. | Yes, in some states | Drivers without health insurance or with limited health insurance coverage and drivers who can’t afford their medical expenses after an accident |
|---|
| Collision | Pays to repair or replace your vehicle after a covered accident, up to your car’s ACV. | No | Drivers who lease or finance their vehicles and drivers with newer vehicles |
|---|
| Comprehensive | Pays to repair or replace your vehicle after a covered non-collision claim, up to your car’s ACV. | No | Drivers who lease or finance their vehicles and drivers with newer vehicles |
|---|
What full coverage doesn’t cover
Despite its name, full-coverage insurance doesn’t cover every situation. Most car insurance companies sell optional policies, also called endorsements, which fill in coverage gaps, including the following:
Roadside assistance covers the cost of basic roadside car repairs and towing.
Accident forgiveness waives your first minor at-fault accident and prevents your premium from increasing after a crash. Generally, you’ll need to have a clean driving record for at least three years to qualify for this coverage.
Gap insurance covers the difference between what you owe on your car loan and your car’s diminished value if you total your vehicle.
Rental reimbursement helps cover the cost of a rental car while your vehicle is in the shop for repairs.
Liability coverage
Liability insurance includes two parts — bodily injury liability coverage and property damage liability coverage.[1] It only applies when you cause an accident and the other driver suffers losses.
In the case of an at-fault accident, the bodily injury liability portion of your policy compensates the other driver for any medical expenses. The property damage liability portion pays for their car repairs. Liability insurance also covers your legal fees if another driver sues you.
In most states, personal liability insurance is a legal requirement. The minimum coverage limits for liability insurance are different in every state, but there’s no guarantee that a minimum-coverage policy will cover the full cost of the damages after an accident.
Uninsured/underinsured motorist coverage
Uninsured motorist insurance generally includes three types of protection: uninsured motorist bodily injury (UMBI), uninsured motorist property damage (UMPD), and underinsured motorist (UIM) coverage. UIM pays the difference between your repair costs and the underinsured driver’s liability limits.
UMBI pays your medical bills, lost wages, or funeral expenses if an uninsured driver causes an accident that injures you or your passengers. UMBI also applies to hit-and-runs and if an uninsured driver injures you as a pedestrian or cyclist. UMPD pays for property damage caused by an uninsured driver if you don’t have collision insurance.
Collision and comprehensive coverage
Collision insurance pays for your vehicle’s repairs after an accident you’re responsible for. It also covers single-car crashes and rollovers. Collision insurance is not legally required, but lenders typically require it if you lease or finance your car. With most policies, the coverage limit of a collision insurance policy is the actual cash value (ACV) of your vehicle, which is the original cost of your vehicle minus depreciation.
Important Information:
Depreciation accounts for normal wear and tear, mileage, age, and more.
Comprehensive coverage pays for your vehicle’s repairs when the car is damaged in a non-collision event.[1] It’s an optional policy, but it’s often required for drivers who lease or have an auto loan.
Comprehensive insurance covers a variety of potential losses, including:
Like collision insurance, the policy limit for comprehensive insurance is usually the ACV of your vehicle. If you file a claim, you’ll generally pay a deductible before your insurer covers the damages, up to the policy limit.[2]
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