What is full coverage car insurance? And other insurance questions answered

There’s an old saying that the only certain things in life are death and taxes, but for vehicle owners, the list can be expanded to include car insurance. Every driver in the United States is required to have it, though the amount and coverage requirements vary from state to state. One term you might have heard is “full coverage,” but the definition is inconsistent between insurers, and it can be confusing to figure out what is and isn’t included in the policy. Let’s take a closer look at full coverage, what it is, and what it may include.

Liability coverage is the baseline

Liability coverage is the most basic insurance available, and it’s required in all 50 states. It protects you against financial ruin for the damage you cause to others in a crash, including their property or person. The amount of liability coverage varies between states, but it’s a requirement everywhere. Though the idea is to keep you from ravaging other peoples’ property and not be able to pay for it.

What does full coverage insurance cover?

Here’s where things get tricky. There’s no legally required definition of full coverage insurance, and some insurers or agents might refer to it as comprehensive coverage. In general, full coverage includes liability, collision, and comprehensive coverage, but some insurance policies may include uninsured motorist protection, GAP insurance, and other benefits. It’s important to note that states don’t require full coverage insurance, but if you finance your car, your lender or bank may require it.

It can also be tempting to cut extra insurance coverage to save money, but doing so could leave you vulnerable to a range of expenses after a wreck, including but not limited to replacing your vehicle, repairing or replacing the other person’s vehicle, and paying for medical expenses. It’s also important to note that even if your loan doesn’t require GAP insurance, paying the small fee for coverage can be a great idea. GAP covers you for the difference between what you owe for a vehicle and its actual value, which can prevent having to make a lump sum payment after a crash to settle your tab with the bank.