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Insurance Writer & Expert
Marissa Hayes is a technical editor and contributing writer. She holds a Bachelor’s Degree in history, and she was the editor of the literary magazine, The Bluestone Review.
Insurance Writer & Expert
UPDATED: Feb 17, 2024
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The minute you buy a car, used or brand new and drive off with it, the value starts to drop. You can get full coverage auto insurance at least for the first year. This is assuming you are buying a decent car and not a clunker. Over time, the full coverage insurance will cost more if the book value of the car decreases faster than you expected. Thus, assuming the worst scenario and the car gets damaged extensively from an accident; the full coverage may not mean the insurance company will pay for all the repairs. They will first check it is worth their money to have the car repaired.
Read more: When does auto insurance coverage begin
If the book value of the car is too low, they will call it a total loss and just pay you the book value of the car instead. This means your monthly premiums just went pfft. Stop paying for the car when you see its book value drop low. In short, you need to keep track of the value of your car months before the renewal of the auto insurance.
Under full coverage car insurance, the owner of a stolen car will get compensated by the insurance company. However, unless the car was stolen immediately after being bought and insured, there is the depreciation cost that the car owner will have to shoulder.
The usual formula used to compute insurance claims on stolen cars is based on current market value, not on the value of the car when you bought or when you insured it. As you may know, a car generally drops in value the older it is. Thus, if your policy is based in $20,000 but that was 6 months ago, the car is probably worth $18,000 which is the base figure the insurance company will use.
There are two scenarios with this kind of question. First, if you are paying for full coverage auto insurance and you decide to rent a car on an out-of-town trip, you will not be able to use your full coverage insurance should you get into an accident with the rental. A car insurance policy is for a specific car. In fact, if you have more than one car, you will have to get separate policies for each car. If you want the rental car to be covered by your full coverage, you will need to contact your insurance provider and request an adjustment or addendum to your current policy.
The second scenario is if you get avail of full coverage car insurance with the car rental company and then you get into an accident. If this happens, then you can claim for damages and have the insurance company pay for the repairs. There is a standard insurance coverage with car rental firms known as CDW which is a daily fee. This can be upgraded to full coverage if you want however you have to check the car rental firm about the details. Salvaged car refers to a car that was completely wrecked and has been repaired. They are cheaper than buying from a dealer but it comes with more risks.
Most insurance companies will only go so far as to approve liability insurance – the legal minimum for insurance requirements. But this does not mean, it’s impossible to find a company willing to stretch its neck out on full coverage.
Their main concern is the road-worthiness and safety of the car. If you’re stumped in finding the right company to insure your salvaged car according to your needs, approach your local insurance regulator or go online to search option. Thus, it may be possible to find an insurance company that can commit to full coverage but it’s not mainstream. Your full coverage insurance is not based on loan amounts but on the condition of the car and the type of driver applying for the insurance. Thus, you are looking at it the wrong way. If you do not want to be required to get full coverage with your bank loan, do not buy a car that is new, almost new, or a car that was launched less than 5 years ago. The usual time frame when the full coverage can be dropped is between 5 to 7 years. Thus, look for a car that was launched 5 years ago.
If you don’t like the choices, study the book value of the cars listed as 5 years old and try to find something around that price range.
Keep in mind that this is still not a foolproof plan. The financing agency will still go over the car and decide if it does not need full coverage insurance. At the same time, the finance agency may increase the deductible and demand collateral for the loan. Full coverage insurance will only cover liabilities for personal injuries, property damage and injuries to other people. It does not cover mechanical breakdowns unless you ask for it specifically.
The insurance company may not necessarily agree with this request. Brake failure is a warranty problem and most insurance companies will refuse to cover it. One exception would be if the brakes exploded and injured the passengers, drivers, and other people. The minimum insurance coverage required in most states is liability insurance. Unfortunately, liability insurance does not cover damage from hail. It is covered by full coverage or comprehensive car insurance.
Hail is considered an “act of nature” and this is allowed under full coverage car insurance. If you know that hail is a common occurrence in your neck of the woods (or city), then it makes sense it included in your insurance coverage. In fact, insurance companies in your area may even offer this type of add-in insurance before you get to ask about it.
Your other option is to keep the car indoors when you know that the chances of hail are high.
Full coverage insurance is practical if your car is still being financed or it is brand new. When the value of the car decreases after a year or two, you can drop the full coverage. It would be advisable to compare the premium payments and the book value of your car. It’s time to be more selective and discriminate on what to insure. You may want to remove collision or theft, or you could remove certain options like insurance on the stereo or other add-ons.
Most experts would recommend letting go of collision insurance after breaching the seven-year mark. However, this would depend on your financial situation. Can you afford to buy a new car if the current one is totaled? If not, then you still need full coverage.
Never remove Liability insurance because it is required in most states so you might as well keep it in. You should also retain the Uninsured Motorist which is insurance for accidents with someone who has no decent coverage.
Call for a quote and find the Cheapest full coverage Option in less than 3 minutes
If you are in the market to compare rates you can call Insurantly’s network of national insurance companies.
The quote process is simple:
Full coverage insures the car and the driver even if the driver is not the owner. However, there are loopholes to this scenario and you auto insurance will not apply on other drivers.
Basically, you have to go over the terms and agreement under your insurance policy. It should state exactly who is covered. Although if you have to lend someone your car, you need to have the incentive and maturity to ask your friend or relative if they have insurance. Not only that, but you also need to find out the extent of their insurance and its validity.
If you have people borrowing your case on a regular basis then it would save you aggravation to include them under your policy. This also refers to your spouse or children. Get their names on the policy to make it clear as black and white that they are insured. It’s difficult to quantify an amount for full coverage car insurance because an insurance company will base their quotes not just on the car, make, year, model, and condition but also on the driver’s/car owner’s profile. Their main concern is the risk factor and their exposure so that they can protect their interests.
When you look at the general averages for certain makes of cars, you can get a general consensus however if you are not an average driver, expect the rate to increase or decrease significantly. For instance the least expensive full coverage annual car insurance based on the data given above is the Mazda Tribute with an annual premium of $1,070. If you are a senior citizen, this figure could go way up by a few hundred. It could increase even more if you are a new driver and skyrocket if you have a record as an accident-prone driver. As a general figure, you can find full coverage for $75 to $100 a month. Full coverage motorcycle insurance is another term for Physical Damage insurance and the legal insurance requirement of the state you live in. You can get more options covered than just the bare legal minimum and it will still be considered comprehensive. In all states, the insurance is regulated, and for motorcycles, no one can drive one on a public road or a highway without carrying insurance. In some states, you cannot buy a motorcycle without first getting liability insurance.
There are deductibles for motorcycle insurance and comprehensive can include fire, theft, collision, vandalism, and flood. Motorcycle insurance has this umbrella offer which is also called extra full coverage insurance. The premium for this type of motorcycle insurance is quite steep but it has high liability limits for the price.
If you are considering compare full coverage options and want to compare rates. We would recommend getting an auto insurance quote online. This link takes you to the home page to begin. Enter your zip code and select the company(s) you want rate quotes from.
Everyone in the car and around the car who has been affected by the accident is covered by the full coverage car insurance. Full coverage car insurance refers to liability, theft, damage to person or property, and third party. However, each full coverage car insurance plan has what is known as a Policy Declaration list which specifically details the coverage. Not everything is covered; not every situation can be turned over to the insurance company as legitimate claims if it isn’t stated in the plan. Thus, it is important to be as forward-thinking as possible and include possible scenarios that could occur with the car that is being insured.
You have to check with the insurance company and read the plan word for word so you know exactly what your car is covered for. Of course, the more you add to this list, the more expensive your premium will be.
If you want to have more coverage, you can get Personal Injury Protection (PIP) insurance and medical insurance. You should also find out if PIP is required in your state so you don’t pay twice for the same kind of insurance. Not everyone gets comprehensive car insurance because they assume that being good drivers, they won’t get into an accident so they try to save the money. Yet, according to the car industry the yearly cases of vehicular accidents number in the 10 million.
Furthermore, out of every 1,000 auto accidents, there is an average of 3 fatalities. But that’s not all. The real shocker is that the average insurance claim for vehicles last year alone was almost $24,000 each. This includes expenses from damage to car and property as well as medical emergency costs.
No one can predict when a child will appear from nowhere right before your eyes as you are driving down a street. It’s impossible to foresee not skidding on an icy road or losing control of your car because you were hit by another.
As a result car insurance rates can go up and many Americans find themselves comparing insurance companies for a better payment option. Here at insurantly.com we help consumers get instant online car insurance from top-rated providers after you enter your zip code. Carriers are competing for your business and provide the lowest rates that are available right now.
Finding low-cost car insurance that fully covers your vehicle is a goal for most drivers. Perhaps you have just purchased a newer vehicle and are required to get comprehensive coverage. If you have never paid full price on auto insurance you could be shocked at the extra monthly cost.
First, read the rules of thumb here in this section and determine if you really need full coverage. If you do then your goal should be to compare car insurance rates to find the cheapest but best value on your policy that suits your needs. Every state is different and every consumer has a different risk profile. The best way to find cheap full coverage is to compare.
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Most states do not require comprehensive coverage but they will recommend it strongly to car owners especially the borderline cases. These cases are senior citizens, young teenage drivers, drivers who live in difficult communities, and to those who can afford to keep it.
The exception to this rule lies in the insurance companies that will demand full coverage for cars under financing. It’s the same no matter what state you live in. There are also 2 states that don’t require any auto insurance. These are Wisconsin and New Hampshire but they require that should an accident happen, the driver has to assume the cost of property damage or injuries to anyone involved in the accident. If these are not attended to, the driver’s licenses can be revoked.
The legal insurance minimum coverage for all states is liability insurance except for Virginia which collects a fee for every car each year as insurance contribution. However, if you have Personal Injury, auto and liability, and medical insurance in different plans, it’s almost like having full coverage.
Fact #1 Being Fully Covered for Car Insurance is Relative
Fact #2 Full Annual Payment Does Not Necessarily Mean Speedier Approval on Claims
Fact #3 Never Throw Away Old or Expired Insurance Plans
Fact #4 Paying Higher Deductibles Can Reduce Car Insurance Rates but You Have to Ask For It
Fact #5 Know Your Blue Book Value to Determine Coverage
Being Fully Covered for Car Insurance is Relative
Every fully coverage car insurance policy is different. It is based on the car, year, brand, model, condition, book value, and driver. There are too many factors to consider which means you can’t compare the insurance for different cars. Thus when you must shop around for the insurance, you should give the same information to each insurance company you want a quote from. Within your quote, you can request for add-on benefits or special offers. This way, it’s easy to compare options.
Full Annual Payment Does Not Necessarily Mean Speedier Approval on Claims
Making claims on your car is never a quick process. All insurance companies will scrutinize every claim whether it is your first or your third claim. They will also delve and dig deep into your history, the supporting documents, and nature of the accident or damage. While paying the full one year will save you money, it does not follow that there are short-cuts that can taken for claims.
Never Throw Away Old or Expired Insurance Plans
Your vehicle’s history should be complete and filed from the time you bought it to the current date. Your old insurance policies are proof that you have a history with an insurance company that you can use to negotiate for lower rates. The old insurance forms can help you show proof that the car has not been in a major accident should you decide to sell it. Usually, when an accident happens and the insurance company has to pay for the repairs, there will be an increase in rates, and that will be obvious in the following year’s insurance policy.
Paying Higher Deductibles Can Reduce Car Insurance Rates but You Have to Ask For It
Like most businesses trying to make a profit, you need ask for the lower rates or discounted rates. The insurance agent may not offer it to you. It’s business so you need to be conscious of these things and not be afraid to demand a lower rate if you pay the higher deductible. Deductibles determine the amount of exposure the insurance has on your car. You will have to pay the full amount of the deductible agreed upon before the insurance company steps in.
Know Your Car’s Blue Book Value to Determine Coverage
If you are planning to get full coverage on an old car or a classic, find out what the Kelley Blue Book Value for your car is. The Kelley Blue Book is the trusted standard on used cars and the information it has on your car can confirm what needs to be insured and for what amount. If the blue book value is high, you need to get full coverage or adjust your plan if the value is lower than what you expected.
High Risk Drivers
Can high risk drivers get comprehensive coverage? Yes of course but the costs associated are just like other types of car insurance such as liability in that it will depend on various risk factors.
High-risk auto insurance companies provide cheap full coverage auto insurance for drivers of all ages, areas of residence, driving records, and type of vehicles. The best way to lower your car insurance costs is to compare auto insurance with Insurantly. If you have struggled to find coverage from a standard car insurance company you may need to refer to your state’s assigned risk pool.
Is there a minimum loan amount that does not require me to have full coverage insurance?
Your full coverage insurance is not based on loan amounts but on the condition of the car and the type of driver applying for the insurance. Thus, you are looking at it the wrong way. If you do not want to be required to get full coverage with your bank loan, do not buy a car that is new, almost new, or a car that was launched less than 5 years ago. The usual time frame when the full coverage can be dropped is between 5 to 7 years. Thus, look for a car that was launched 5 years ago.
If you don’t like the choices, studies the book value of the cars listed as 5 years old and try to find something around that price range.
Keep in mind that this is still not a foolproof plan. The financing agency will still go over the car and decide if it does not need full coverage insurance. At the same time, the finance agency may increase the deductible and demand collateral for the loan.
Is my vehicle still covered if it gets totaled?
If your car figures in an accident and is totaled or turns into a unsalvageable wreck, your full coverage car insurance will come in very handy. As long as you have kept your payment current, and you do not have any delinquencies on file with the insurance provider, they will start the ball rolling.
You will get money from your insurance company minus the natural depreciation and shift in market value for your car. You will never get the full insured value because the car is deemed to have aged since the time the insurance contract was signed. However, if you have a fair and honest insurance provider, you can expect to get the right amount in payment of claims. On the other hand, if your full coverage includes a new car replacement option, you get a new car instead of a check.
There will be a period where the insurance company will look into the accident to find out how it all happened. It is possible for them to deny a claim if you were drunk or something similar and you caused the accident to happen.