How Do I Get Cheap Full-Coverage Insurance?

Sara: Hi, Julia!

Julia: Hey, Sara!

S: How are you?

J: I’m good. How are you?

S: Are you excited to talk about insurance today?

J: I’m so excited.

S: Awesome. So, welcome to “No Dumb Questions.” This is the Insurify podcast for straight talk on insurance coverage, claims, and savings, and I’m Sara.

J: And I’m Julia! And today, we are taking on a big one. “What is full-coverage car insurance?” 

S: And I can’t even tell you how many times I’ve had people ask me, “Is full coverage even worth it?” or, “What does it mean?” So, we’re going to cover everything.

J: Yes. And full coverage can actually be a really good investment. But it’s important to know what it includes and if it’s right for you.

S: For sure! So, we’re going to break down all the parts of full coverage, what’s included, what’s not, when it’s worth paying for.

J: Yes. And we’re going to clear up some myths — because there are a lot — and give you guys some real advice on how to choose the right amount of protection for you.

S: All right. Let’s get this show on the road.

J: All right, before we begin, let’s break down some terms, because that’s super important to understanding your policy, what the heck is in front of you, what you’re reading. So, we are going to talk about liability coverage and full coverage, which includes comprehensive and collision. So, we’re going to get y’all feeling financially empowered, absolutely ready to save money, knowing these terms.

S: Yep. So, liability coverage is the base coverage that everyone has to have to legally drive. It’s required in every state except for New Hampshire. And if you cause an accident, liability insurance covers the other person’s car, the other person’s medical bills. It doesn’t cover any of your stuff.

J: Yes, that is super important to understand. I think because it’s kind of like the base required thing, some people are like, “Great, that’s all I need!” Not true. It’s made up of these two kind of core components. The first is bodily injury liability coverage, which, just like it sounds, is going to cover medical bills, lost wages — basically like costs associated with the damage done to another person’s person. And the other part of that is property damage liability coverage, which, again just like it sounds, is going to cover damage that you’ve done to their car or to a pole, a wall, a fence, etc. You know, someone else’s property, and pay for that damage.

S: So, just to reiterate, it does not cover your own car. It only covers the other person. So it won’t pay for any repairs, damages to you or your property.

J: Yes, and like I said, the state-minimum mandated levels are not always enough. So it is at least worth considering getting liability coverage that is more than those minimum levels. 

S: I mean, say you have like the state minimum. State minimum is like $15,000 in property damage. Say you hit a car, and you cause $20,000 in property damage. You’re on the hook for that extra $5,000. So, it’s really important to make sure that you have enough coverage, even on liability insurance.

J: That’s so true, because not everyone’s got that $5,000 in their bank account. OK. Moving on. So, the other big piece of this is full coverage, which is a step up from liability and includes liability.

S: Right. So, full coverage is not required by law, unlike liability. And full coverage includes liability plus comprehensive and collision coverage. Although it isn’t required by law, if you have a lease or a loan on your car, your lender might require you to have it.

J: A lot of people do end up having full coverage for that reason, I feel like.So, to kind of get into what exactly those are. So, collision coverage pays for your car. If you crash into another vehicle or object, it’s basically going to cover the damage to your vehicle.So what that means is that even if an accident is your fault, that coverage still kicks in and will cover the damage to your vehicle. And it’ll even cover the damage if you crash into a telephone pole.And then comprehensive, which is the other key part of full coverage, covers kind of just about everything else. Kind of like it sounds, right? It’s comprehensive. So that could be theft of your vehicle, could be a fire that, you know, damages your vehicle, could be vandalism, weather events, like hail damage, flood damage, things like that. And, like you said, it is typically optional unless your lender or your lease requires it.

S: So basically full coverage covers your car plus the liability. Liability insurance does not cover your car. 

J: That is so important to understand.

S: And so another common coverage that you may see is uninsured or underinsured motorist protection. So this protects you if you’re in an accident and someone doesn’t have car insurance or doesn’t have enough car insurance to cover all the damages. Some states do require this one.

J: And there are actually some other requirements that you may see depending on the state that you live in. That could be medical payments coverage, which would cover medical bills and injuries, and personal injury protection, which, like it sounds, covers your injuries. Also called PIP, if you ever see that: P-I-P.

S: So it’s important to match the coverage to your situation.

J: And that is a tricky one. And it really is individual. I think, you know, that’s part of why we wanted to do this podcast and talk about this, because, you know, it’s really not a one-size-fits-all kind of situation.So yeah, you know, if you have an older car, you’ve paid it off, and you can afford to replace it — and it’s cheap to repair — then it might be totally fine for you to just get liability coverage, which would seriously reduce your monthly insurance costs. But if you have a newer car, an expensive car, or if you don’t and you just can’t afford to replace your car, it might be worth it to get full coverage so that you have that security in place even if it comes at like a higher monthly cost. But again, this will really vary from driver to driver.

S: And so knowing what each coverage is can really help you make those important financial decisions, because you don’t want to overpay for what you don’t need. And, at the same time, you don’t want to be undercovered so you’re on the hook for big bills. 

J: The balance, the balance is so hard! 

S: The balance is so important.

J: OK. So, now that you’re equipped with the vocab, let’s get into talking about getting cheap insurance.

S: Let’s do it.

J: OK. So, the first thing to know is that full coverage isn’t a single policy. It’s actually a bundle. It’s multiple policies.

S: Yeah. So, there’s the core trio, which is your liability insurance. Which, as you guys know, covers others if you cause a crash, but not your car.

Then the full-coverage part comes in with collision, which covers your car if you hit a vehicle or object.

And the next part is comprehensive, which covers non-crash damage. So, like theft, vandalism, weather damage, animals, falling objects, etc.

J: Yeah, exactly. There are some additional terms you'll see with full coverage. It kind of sometimes depends on your state or just your policy.

So, some of those are personal injury protection, which you may see as P-I-P, or PIP. That will cover medical bills and lost wages regardless of fault — so, regardless of who caused the accident. And it is required in some states, so you might have to have that on your policy if you’re in a certain state.

Then there’s medical payments coverage — often called MedPay, for short — that helps with medical bills but has kind of a smaller scope than PIP, and it’s sometimes required but usually optional.

And then one that you will see in a lot of states — and even if it’s not required, it’s usually a good idea — is uninsured or underinsured motorist coverage. And this protects you if the other driver doesn’t have or has too little insurance.

For example, like, if they cause a crash, their liability insurance should theoretically kick in, but if they don’t have that, then that kind of coverage for your policy would help cover that cost.

S: Exactly. And then you’ll see some other common coverages that aren’t usually state-mandated.

So, this is going to be gap insurance. Gap insurance covers the difference between your loan or lease balance and the car’s actual cash value if it’s totaled.

So, when you drive your car off the lot, it starts losing value. That’s depreciation. Your insurance company is going to pay out the depreciated value if you total your car. If you already have a very big loan, the depreciated value doesn’t cover that loan. Then that’s where gap insurance comes in.

J: That can be so helpful. Yeah.

S: Yeah. The next is roadside assistance. That’s like jumps, tows, lockout help, accident forgiveness — so your rates won’t go up after your first minor at-fault accident — and then rental reimbursement. So if your car is damaged and it’s in the shop, your insurance will pay for a rental car.

So, the key point here is full coverage is commonly liability, collision, and comprehensive, with sometimes extras of uninsured or underinsured motorist coverage and PIP or MedPay. But then the definite extras — which won’t ever be required by your state — are roadside assistance, accident forgiveness, rental, gap.

So always check your policy when you’re getting a quote, because sometimes they’ll include, like, roadside assistance or rental car coverage, which will inflate your quote when maybe you don’t need that. So it’s always worth giving a check to see what’s included.

J: Exactly. And I think, just to like, to translate, basically, “full” doesn’t always mean “complete.” So that’s why Sara’s talking about, like, really reading those details.

S: Yeah. So now that we’re familiar with some terms, let’s get into what full coverage means in the real world and then how to save on your policy.

J: Let’s do it!

S: All right, Julia, are you ready to be grilled?

J: I’m so ready! Let’s go!

S: So, does full coverage cover everything?

J: No. Full coverage does not cover everything. Remember: Full, not complete. So it does not cover routine maintenance, wear and tear, or mechanical breakdowns. It’s for covered losses like accidents, theft, and disasters.

S: All right. What’s the difference between liability-only insurance and full-coverage insurance?

J: Yes. It’s kind of in the name a little, which is helpful! So, liability insurance is liability only. So basically, it covers others when you are at fault — so, damage to someone else’s car, covering costs for someone else’s injuries.

Whereas full coverage includes liability, but it also includes collision and comprehensive coverage that will cover your car, often plus those optional add-ons.

S: How much does full coverage cost, on average?

J: So, right now it costs about $213 a month, according to Insurify data. That’s the U.S. average, so keep that in mind, because your rate is going to really depend on where you live, the car you drive, your driving record, your claims history, and, in many states, also your credit history.

S: Is full coverage legally required?

J: No. Full coverage is not legally required. Liability insurance is the legal minimum. However, most people do need full coverage because a lot of people are driving cars that they're either leasing or they've bought on a loan. And often lenders and lessors will require full coverage while you owe money on the car.

S: Can I get cheap car insurance with full coverage?

J: So, it depends. You know, there are definitely strategies to make it more affordable. What is cheap really varies depending on who you are, of course. We recommend stacking discounts. So, really doing your research on what you qualify for. Comparing lots of quotes, so really casting out a wide net, as they say, raising your deductible responsibly. Again, doing the math on whether that’s something you can afford, and keeping a clean record, so driving safe.

But I will say that it’s very unlikely it will ever be cheaper than just liability insurance because, in essence, it offers more coverage, meaning insurers are taking on a greater risk, and that’s what you’re then paying for. So, it’s unlikely you’ll find full coverage at quite the same level as liability-only rates, but again, it really depends on where you are.

S: Does full coverage include gap insurance?

J: Not automatically. Gap is usually an optional add-on, but we recommend adding it if you owe more than the car’s value. But always ask about that. It’s not a fit for everyone, but it can be a really great fit for some.

S: Yes. Can I drop my full coverage?

J: That depends on your situation. So, if you own your car outright, if it’s yours, then yes, you could. But again, we recommend really thinking about factors like the car’s age, the car’s value, and your budget. Are you comfortable self-insuring repairs and paying for those and covering replacements?

If you have a loan on your car, if you lease your car, nope, you probably can’t drop full coverage, because that’s something that that contract requires. But every time your car insurance comes up for renewal, just kind of re-evaluate, think about it, see how your needs have changed, and you can make adjustments at that time.

S: Perfect. Great job!

J: Thank you!

J: All right, Sara. It’s time to bust some myths. Are you ready?

S: I’m so ready.

J: Amazing. OK, myth or fact? Full coverage replaces my car for what I paid.

S: Mostly myth. The payouts are going to be based on your actual cash value, which is the depreciated value of your car, not the purchase price. So, like we mentioned earlier, the second you drive your car off the lot, it starts to depreciate.

Gap insurance can help fill in the loan/lease difference. But if you owe more on your car than it’s worth, that means you’re underwater on your loan, and you should probably consider gap insurance.

J: Exactly. Thanks for explaining that.

OK. Myth or fact? All insurers define full coverage the same way.

S: This is a myth. So, the contents vary. You always want to verify what’s included in your coverages and limits.

So when I was personally comparing quotes, I got a really high quote, and I was like, “Hey, what’s in that?” And they had included rental car reimbursement and roadside assistance. But the second time I went to compare quotes, that wasn’t included. So, my quote was definitely lower.

J: Myth or fact? Full coverage is expensive.

S: Part myth, part fact. Like we said, it’s going to cost more than liability, but you can make it more affordable by comparing quotes, using discounts, and keeping your record clean.

J: OK. Myth or fact? Full coverage automatically includes extras like rental reimbursement and roadside assistance.

S: Usually fact. Some policies bundle them; others sell them as add-ons. So, you want to check your policy details or ask an agent what’s included. Like I said earlier, like one had it included, one didn’t. So you want to make sure you know what’s in your quote.

J: Yeah, definitely wouldn’t assume automatic on anything. Always always read that policy, and always want to make sure you know what you’re signing up for.

Myth or fact? Full coverage protects me from uninsured drivers by default.

S: This is a myth. So, you’re going to need uninsured motorists or underinsured motorist coverage to be protected against drivers without insurance. It’s required in a good handful of states. Honestly, in my opinion, it’s a worthwhile coverage to have, even if it’s not required.

J: Yeah, I agree. 

OK. Myth or fact? I can lower my full-coverage rate without cutting coverage.

S: Fact, definitely. Yeah. So, safer driving, shopping for quotes, discount stacking, keeping your credit healthy where you can, and higher deductibles that you can afford can help reduce your premiums.

J: You’re so wicked smaht, Sara!

S: Oh, my gosh. Thank you!

J: All right. Let’s get into your action plan so you can be wicked smaht, too!

S: Let’s do it!

J: OK., Let’s build your action plan, so that you can be saving some money on full-coverage insurance. All right. So, first, figure out if you even need full coverage.

So, you’re going to consider your car’s value. You’re going to consider how much risk you’re comfortable taking on, in terms of how much money. You’re going to think about your environment, where you live, where you park, whether there are any severe weather risks like hail, hurricane, wildfires, etc., that you want to be protected against.

And, of course, you’re going to have to consider whether you have a loan or a lease that requires you to have that coverage.

S: Yes. So, now that you’ve decided what you want and you’ve gone through your profile, here’s how you’re going to get cheap full coverage.

So, first you’re going to get three to five quotes with the same limits and deductibles.

J: Ask about add-ons, for sure, and add or take away any that you don’t need or want.

S: And you’re going to apply any eligible discounts. Make sure you ask about them, because they’re not always advertised. Consider higher deductibles on your collision and comprehensive coverage if you can afford the up-front cost.

J: Yes. And pick the policy that balances protection and price.

S: Definitely. And you want to recheck at every renewal and update it after life changes.

So, if you move to a safer area, if you get a new job, if you pay off your loan, if you turn a certain age, you can qualify for different things. Like we’ve said, everyone’s profile is different. So, always be checking those quotes.

J: Yes, agreed. All right. Is it time to wrap this up?

S: Let’s wrap it up.

J: Amazing.

J: So, the bottom line is that full coverage means more protection, but everyone is different.

S: Yeah. Think of it like a combo meal.

J: Oh, my gosh. I love this. OK.

S: Liability only is just like a burger. 

J: Just a plain burger?

S: Just a plain burger.

Full coverage is the burger plus the fries and a drink.

J: That’s sounding real good. 

S: The full meal.

J: Yeah, I’m hungry.

S: And then the dessert is like gap insurance, roadside assistance, accident forgiveness.

J: See, this, I like. I like the full meal over here.

S: I like the full meal!J: Sounds real good!

And if you live in a higher-risk area or really rely on your car, it’s often worth it.

S: Yeah. And compare smartly, add what you need, and skip what you don’t.

J: OK. That’s it for today’s episode of “No Dumb Questions!”

S: Thank you all for joining us. Don’t forget to subscribe and share with a friend who’s also tired of paying too much for insurance.

J: And who isn’t? Send us your questions using the link below.

S: Until next time, drive safe and save money!