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If you’re wondering how full coverage auto insurance protects both your wallet and your wheels, you’re in the right place. You might have heard people throw around the term “full coverage” and guessed it was some all-inclusive magic shield. The truth is, it’s not an official coverage type, but rather a convenient way to say you have liability, collision, and comprehensive coverage in one bundle. Let’s walk through what that means, what it tends to cost, and how to decide if it’s worth it for you.
Compare liability and full coverage
Liability insurance is the coverage your state probably requires. It helps pay for damages and injuries you cause to others in an accident. However, it won’t handle your own medical bills or vehicle repairs if you’re at fault, which is why collision and comprehensive are so crucial.
What “full coverage” usually includes
- Liability coverage: Pays for damage and injuries you may cause to others.
- Collision coverage: Pays for damage to your vehicle if you crash into another car or object.
- Comprehensive coverage: Steps in for non-collision events like theft, weather damage, or falling objects.
There isn’t a universal definition of “full coverage,” so each insurer may have its own take. Some also recommend adding extras like roadside assistance or rental reimbursement for extra peace of mind. If you want to explore all your coverage options side by side, a great starting point is an auto insurance quotes comparison, where you can see the variations in coverage levels and costs.
Consider how costs add up
It’s no surprise that getting more coverage raises your premium. On average, full coverage car insurance costs around $1,997 per year, whereas liability-only policies cost about $671 per year (WalletHub). Of course, your actual amount may be higher or lower based on factors such as your driving history, vehicle type, and where you live.
Factors that influence your rate
- Your vehicle’s make and model: High-end cars usually cost more to insure.
- Your driving record: Accidents and tickets bump up your premium.
- Location specifics: Higher traffic, weather risks, and even local repair costs can raise your rates.
- Credit history: Insurers typically reward a solid credit record with lower prices.
If you’re labeled a high-risk driver due to past violations, you can still find coverage. However, you’ll likely pay more, so you might want to check auto insurance for high-risk drivers for tips on scoring a better deal.
Check ways to reduce premiums
You haven’t locked in your rate until you finalize that policy. Consider adjustments that can drop your bill without sacrificing too much coverage.
Raise your deductible
A higher deductible (the amount you pay before insurance kicks in) can lower your premium by up to 30 percent (Insurance Information Institute). If you’re comfortable setting aside a bit of emergency cash, this is a good way to keep monthly costs down.
Grab discounts and bundles
- Multi-policy discounts: Bundling your auto and home coverage can trigger cost savings.
- Multi-vehicle discounts: Insuring more than one car under the same policy often leads to a better rate.
- Low mileage discounts: If you’re carpooling or just not driving much, your mileage might snag you a discount.
For a full list of possible savings opportunities, take a peek at auto insurance discounts. It’s surprising how many ways you can trim those costs once you start asking.
Keep a good credit record
Insurers often check your credit info, and people with higher credit scores typically file fewer claims (Insurance Information Institute). Paying bills on time, keeping balances low, and quickly disputing any credit report errors are all steps that can score you a better premium over time.
Know if full coverage is right for you
Should you pay extra for full coverage auto insurance? That depends on how comfortable you are repairing or replacing your vehicle out of pocket if something goes wrong. If you’re driving a newer or pricier car, having collision and comprehensive can prevent a potential financial hit. In fact, many lenders require you to carry both if you lease or finance your car (Progressive).
On the flip side, if your car is older and its worth is pretty low, paying more for collision and comprehensive might not be cost-effective. It’s smart to compare the annual cost of these coverages against your vehicle’s value. Checking out top-rated insurers that offer different coverage levels can help. You might find the right fit among the best auto insurance companies.
Wrap up your coverage
Full coverage auto insurance can help protect you against those costly “what if” scenarios, covering more than basic liability alone. But it’s not a magical one-size-fits-all solution. Think about how much you drive, the value of your vehicle, and the financial risk you’re willing to take. If you actually need that extra cushion, full coverage might be worth every penny. If not, explore alternatives and keep an eye out for ways to reduce your premium.
Ultimately, the best coverage is one that balances your comfort level and your budget. With the right strategy, you’ll feel secure behind the wheel without letting insurance costs drive you up the wall.
