Full Coverage Car Insurance

Get the ins and outs about full coverage car insurance, which protects your vehicle in many different scenarios.

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Full Coverage Car Insurance

Full coverage car insurance is a combination of insurance coverages designed to ‘fully’ cover you in the event of an accident. This would include coverages that aren’t legally required, but that would give you extra peace of mind in many different scenarios.  

What is full coverage car insurance?

You’ve probably been hanging out at the bar before, wondering why that dude in the corner is always loudly bragging about how he has ‘full coverage’ insurance on his Toyota Land Cruiser. I mean, we get it Bill, and we’re jealous, but cool it already…

In all seriousness, full coverage car insurance is simply a term people use to describe a policy with a combination of coverages that help protect your car. It’s important to understand that it doesn’t mean you’re covered for everything, nor does it guarantee your claim will be approved. Full coverage car insurance combines various coverage options and endorsements to fully cover you up to any applicable limits you selected. It’s a single policy you build with your insurance company to provide the best combination of coverage for you.

When people say ‘full coverage’ they usually mean that you have liability coverage (including bodily injury and property damage), comprehensive coverage, and collision coverage on their car insurance policy. 

A Lemonade Car policy allows you to adjust your car insurance coverage limits and deductibles (when applicable) for each of these coverages. It also includes several additional coverages you can include to make sure you, your passengers, and your cars are protected—things like roadside assistance, temporary transportation coverage, and extended glass coverage. 

Below, we’ll take a closer look at some of the coverages that would be included under the hood of a full coverage car insurance policy. 

What is liability coverage?

If you’re at-fault in an accident, liability coverage pays for many costs you’re responsible for. Bodily injury liability covers another person’s medical bills, and property damage liability pays for damage to someone else’s property. This could be their car, but also a fence in front of their house, or the facade of the Arby’s franchise they own, if you damage it with your car. 

Most states require that drivers carry liability coverage in their car insurance policy. They also set minimum coverage requirements to protect other drivers on the road. Liability coverage usually contains three categories, each of which has its own limit:

  • Payment for bodily injury per person
  • Payment for bodily injury per incident
  • Payment for property damage per incident

The minimum liability limits required by law may not adequately protect you if you’re liable in an accident. You’ll likely want to opt for higher liability limits that are much higher than your state’s state minimum. 

What is comprehensive coverage?

Comprehensive coverage pays for physical damage to your car from hail, vandalism, flood, fire, and more. 

What is collision coverage?

Collision coverage kicks in if you’re in an accident and collide with another car or object (such as a garage or fence). Remember, collision insurance protects your vehicle, while liability coverage protects the other driver’s vehicle (in an at-fault accident). 

Other types of coverage you can include in full coverage car insurance

A full coverage policy is a customized approach to car insurance coverage. After you’ve picked your basic coverage you have many other coverage options to add to your insurance policy.

Roadside assistance

Some insurance companies offer roadside assistance as an optional coverage  to your insurance policy. Your insurer contracts with local tow companies to provide help if you break down at the side of the road. It also pays for towing to a nearby dealership or repair shop, if needed. BTW, if you have a Lemonade Car policy and keep the right permissions enabled on our app, you’ll receive roadside assistance for free!

Medical payments

Liability coverage pays for the other driver’s medical bills, but medical payments (aka MedPay) may help pay your medical costs if you’re injured in a car accident. It would help pay for things like health insurance deductibles and copays, surgery, or x-rays, plus your passengers’ medical expenses. 

Personal injury protection (PIP)

Some states offer personal injury protection (aka PIP) instead of MedPay. This coverage will help pay medical bills from a covered loss for you and your passengers. It also might pay other expenses while you recover from your injuries—like childcare costs, or lost income.

Uninsured and underinsured motorist coverage

If you get into a collision with another car and the driver is uninsured or underinsured, you could still end up paying for repairs and medical bills, even if you’re not at fault in the accident. Uninsured motorist coverage can help pay for damages caused by a driver who doesn’t have car insurance.  Underinsured motorist coverage protects you if a driver doesn’t have enough coverage to pay the car accident’s full expenses. 

Gap insurance

If you’re in a car accident and your car gets totaled, your insurance company would only pay out the car’s current value. If what you still owe on your car loan is more than that amount, you’ll be a bit stuck, as you still have to make payments to your lender. 

Gap insurance covers you for the “gap” between your car’s current value and what you owe a lender, paying off your loan in full.

Rental reimbursement coverage

If you’ve been in a car accident that ends with your car at the shop, or you’re looking for a new ride because your old one was stolen or damaged beyond repair, you’ll need something to drive. Rental reimbursement coverage pays for a rental car after an accident. This coverage usually pays for a rental car up to a daily limit and limits the number of days you can rent.

Lemonade’s temporary transportation coverage also includes using transportation network companies like Lyft or Uber, and public transit, in addition to a rental car.

How does carrying full coverage impact my car insurance rates?

When you’re getting auto insurance quotes, you’ll want to find the right balance between premiums, deductible, and coverage options. Full coverage auto insurance will cost more because the insurer is providing more coverage to you. But if you’re in a costly accident, you could end up saving more money in the long run. 

When you purchase certain coverages—like collision, comprehensive, and uninsured/underinsured motorist coverage—you may need to select a deductible. A deductible is the amount of a claim you are responsible for before your insurance policy starts paying out. If you pick a higher deductible, you’ll pay a lower amount for your full coverage car insurance policy, since you’d be responsible for more out-of-pocket expenses in the event of a claim. 

Please note: Lemonade articles and other editorial content are meant for educational purposes only, and should not be relied upon instead of professional legal, insurance or financial advice. The content of these educational articles does not alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. While we regularly review previously published content to ensure it is accurate and up-to-date, there may be instances in which legal conditions or policy details have changed since publication. Any hypothetical examples used in Lemonade editorial content are purely expositional. Hypothetical examples do not alter or bind Lemonade to any application of your insurance policy to the particular facts and circumstances of any actual claim.