People often say "full coverage," but there is no policy by that name. It usually means liability plus collision and comprehensive, and often uninsured motorist coverage. Whether you need it depends on your car, your finances and your lender.
When Full Coverage Makes Sense
- You have a loan or lease. Lenders require collision and comprehensive until the vehicle is paid off. Leases often require gap coverage too.
- The car is newer or valuable. If you could not replace it from savings, you want it protected.
- You live or drive where risk is higher. Heavy traffic, theft, hail and deer strikes are all comprehensive claims.
- You would struggle with a surprise bill. Insurance exists for the loss that would hurt most.
When You Might Reconsider
On an older, paid-off car, the cost of collision and comprehensive can approach what the vehicle is worth. A common rule of thumb is to rethink those coverages when the annual cost reaches roughly 10 percent of the car's value, or when you could comfortably replace the car yourself. Remember that your payout is limited to the car's actual cash value minus your deductible.
Keep liability and uninsured motorist coverage regardless. Dropping physical damage coverage never reduces your legal responsibility to other people.
Do Not Forget the Extras
- Gap coverage pays the difference between what you owe and what the car is worth in a total loss.
- Rental reimbursement helps while your car is in the shop.
- Roadside assistance covers towing and lockouts.
Not Sure? Let Us Run the Numbers
We can price your vehicle with and without physical damage coverage so you can make a confident decision.