What is Full Coverage Auto Insurance?
The Origin of the Term
We often get asked about full coverage auto insurance. “Full coverage” isn’t actually an insurance term. It started with car dealerships using full coverage as a way to simplify the insurance process.
What it Means
When a car dealership says “full coverage,” they are referring to comprehensive and collision coverage. Those are the two coverages that cover the vehicle for the purpose of the lien (if you’re financing it.) Comprehensive covers if your car gets hit by hail, catches on fire, gets vandalized, etc. Then collision coverage is meant to be used when you collide with another vehicle, curb, or another object. When the dealership says full coverage, they’re really only talking about those two coverages.
The Wide Range of Coverage
Most people think that full coverage is every coverage that is offered at an agency. That’s not typically the case. We offer liability (which you must have in the state of Texas), uninsured motorist, personal injury protection (PIP), rental reimbursement, roadside assistance, and comprehensive and collision. Now we even have endorsements for gap coverage and customization coverage! But all of those things need to be added on by endorsement.
Hopefully this helps clear up any confusion and further explains the term “full coverage.” It’s a term used by car dealerships and many people out there, but it is not an insurance-specific term.