We often get customers asking us about “full coverage” on their auto policy. While minimum coverage is very easy to explain-it’s the very least amount of insurance that you must buy, as required by law-“full” coverage is a little less cut and dry.

When it comes to your insurance policy, there are a variety of features you can include beyond the minimum liability coverage required by law. These features offer many different benefits and protect you from different types of risk. Some of the additional components in a “full” coverage policy can include:

• Liability

• Comprehensive (also known as “other than collision”, or OTC)

• Collision

• Loss of use (rental reimbursement)

• Roadside assistance

• OEM parts (original equipment manufacturer)

• Gap insurance

• Accident forgiveness

• Decreasing deductible

• Total loss deductible waiver

• Vehicle Customization

As you can see, there are many pieces that fit together to create car insurance, and if you purchase minimum coverage, you’re only getting one of them: Liability.

Liability

If you are in a wreck and deemed to be at fault, then you’re responsible for the damage caused. The state mandates that you buy insurance because most of us would not be able to pay out of pocket to cover that liability in the event of an accident that causes damage or injury. However, states decide on what the bare minimum requirement is for that coverage. In South Carolina, those minimums are $25,000 of coverage for individual injury per person, $50,000 of coverage for injury in total for the entire accident, and $25,000 of property damage. You’ll often see this expressed as 25/50/25. But remember, that only covers injuries to others, not you, as the driver. The same applies to property damage. That $25,000 is available to pay for damage to the other person’s vehicle, not yours.

There’s a catch though, these are minimums for coverage amount, but there is no law stating that you can only be liable for the amount of coverage you’ve purchased. If you are in a wreck with a brand new $60,000 pick-up truck, and it’s totaled, your $25,000 of property damage coverage is going to be exhausted very quickly, and you’ll end up liable for the difference. This can rapidly harm you financially. In an even worse scenario, if another person is killed, that $25,000 per person coverage will not come anywhere close to settling a wrongful death suit.

This is why having much higher limits of liability are the first part of a “full” coverage policy. Exactly what those limits should be is up to you, and some carriers will offer very high limits you can purchase, such as 300/300/300. This would be $300,000 of coverage for each of the above categories. You’re now much better protected in the event of a wreck, although adding a separate umbrella policy wouldn’t be a bad idea.

Comprehensive

The next major category is Comprehensive, also referred to as Other than Collision. Let’s say there is a bad hailstorm and your car is totaled by the hail (it happens more than you’d think), this would be something covered as “other than collision” since you did not collide with something on the roadway. Flood damage from a storm, fire damage not the result of a wreck, a tree falling, or damage caused by hitting an animal are all things that fall under comprehensive. If you only have liability coverage, you’re totally unprotected.

Having comprehensive coverage in addition to high limits of liability is often what people think of as “full coverage”, but there are many other features you can add to your policy that will help you out in the event of a claim.

Collision

We've talked about other-than-collision, but the obvious opposite of that is collision coverage. If you collide with an object, such as another automobile, or something else, like a mailbox, or the drive-thru window at Starbucks, collision coverage will pay for the damage to the vehicle, whether or not you're at fault. This is one of the most important components of a policy. If you only have liability coverage, your policy will not help you fix or replace your car after a wreck you're deemed to be at fault for. 

Other Options to Consider

Loss of Use coverage, also known as rental reimbursement is the amount your policy will pay, per day, for a rental car while yours is being fixed. If you are in a wreck that is not your fault, and the other party’s insurance company isn’t paying for a rental for you, or, the wreck was your fault, you’ll be glad you have this feature. You can purchase whatever amount you think is necessary to replace your vehicle while it is repaired or replaced. If you’ve got four kids, the $30 per day economy car probably isn’t going to cut it. If you already drive a small car, you probably don’t need $100 per day of loss of use coverage either. Working with your local agent, you can determine exactly how much is right for you.

Roadside assistance is another great feature to add on. If you have a flat tire, need a tow, or run out of gas, having that option available on your policy is extremely useful. OEM, original equipment manufacturer coverage, will ensure that your car is repaired with genuine parts from your vehicle's manufacturer, if they are available. If your car has been customized at all, let's say with aftermarket rims, a fancy stereo, or an expensive lift kit, then Vehicle Customization will pay to make those same customized changes to your next vehicle.

Other great add-ons include accident forgiveness and decreasing deductibles. With Accident forgiveness, you won’t see a rate increase after one accident. With a decreasing deductible, your deductible amount will go down each month you don’t have a claim. On some policies, it will decrease all the way to zero. A related feature is total-loss deductible waiver. If your vehicle has to be completely replaced, you don’t pay any deductible at all.

Gap Insurance

The last feature on this list is an often overlooked but very helpful addition to a policy, particularly on a brand-new car. Gap Insurance. If your car is worth less than you owe on it, there will be a gap in what the insurance policy pays you and the amount you owe to the lienholder. You’ll be stuck paying the difference out of pocket in the event the car is totaled. If you buy a brand-new car with little or no money down, you almost certainly have this gap. Adding this protection will fill in that difference and protect you from having to pay off a car that’s sitting in a junkyard, instead of your garage. As you pay off the car and the loan becomes less than the car's value, you can drop this coverage from your policy to save a few dollars.

Insurance can get complicated, especially when you make the smart choice to be protected by a comprehensive, well-rounded policy, but it doesn’t have to be intimidating. We recommend that everyone find a local agent they are comfortable talking to and asking questions, someone who can respond in plain English and help you find the policy that fits your needs and your life.