What Does “Full Coverage” Auto Insurance Actually Cover in Michigan?
“I need full coverage.”
It’s one of the most common things we hear when someone calls for an auto insurance quote. But what does “full coverage” actually mean?
The important thing to understand is that “full coverage” isn’t an actual insurance coverage or a specific type of policy. It’s an informal term generally used to describe an auto policy that includes liability coverage along with comprehensive and collision coverage.
And despite the name, full coverage does not mean everything is covered.
Let’s break down what it typically includes and some of the coverages you may still want to consider.
Liability Coverage
Liability coverage helps protect you financially if you’re legally responsible for injuries or property damage resulting from an accident.
In Michigan, drivers are required to carry certain liability coverage as part of their auto insurance policy. However, simply carrying the minimum required limits doesn’t necessarily mean you have enough protection for a serious accident.
Higher liability limits can provide additional financial protection for your income, savings, home, and other assets if you’re involved in a major accident.
Personal Injury Protection (PIP)
Michigan is a no-fault state, so Personal Injury Protection is another important part of an auto insurance policy.
PIP includes benefits related to injuries resulting from an auto accident. Michigan drivers have different options when selecting their PIP medical coverage, and eligibility for certain options can depend on factors such as health insurance or Medicare.
Because PIP options can significantly affect both your coverage and premium, it’s important to understand which option you’re selecting rather than simply focusing on the final price.
Collision Coverage
Collision coverage helps pay for damage to your own vehicle when it’s damaged in an accident, subject to your deductible and the terms of your policy.
Michigan also has three different types of collision coverage:
Broad Form Collision generally provides the most protection of the three. If you’re not substantially at fault in an accident, the deductible is typically waived.
Standard Collision pays for covered collision damage regardless of fault, but you generally pay your deductible.
Limited Collision provides more restricted protection depending on fault.
The type of collision coverage you choose can make a significant difference when it comes time to file a claim.
Comprehensive Coverage
Comprehensive coverage, sometimes shown on your policy as Other Than Collision, covers many types of physical damage that aren't caused by a collision with another vehicle.
Depending on the circumstances and policy, this can include things such as:
- Theft
- Vandalism
- Fire
- Hail or storm damage
- Falling objects
- Animal collisions
Comprehensive coverage is also subject to the deductible you select.
Does Full Coverage Include Rental or Roadside Assistance?
Not necessarily.
This is where the term “full coverage” can become misleading.
Even if your policy includes liability, comprehensive, and collision coverage, other useful coverages may still be optional.
Depending on the insurance company and policy, these may include rental reimbursement, roadside assistance, uninsured or underinsured motorist coverage, loan or lease payoff coverage, and other options.
That’s why two people who both say they have “full coverage” can actually have very different insurance policies.
Full Coverage Doesn't Mean You're Covered for Everything
Having comprehensive and collision coverage doesn't eliminate deductibles, coverage limits, exclusions, or other policy conditions.
For example, you could have “full coverage” with a $500 collision deductible while someone else has a $2,000 deductible. One policy may include rental coverage while another doesn't. Liability limits can also vary significantly from one policy to another.
The words “full coverage” alone don't tell you whether you have good coverage.
What matters is what your individual policy actually includes.
This is also one of several common mistakes we see when reviewing auto policies. For more examples, check out our guide to 7 Common Auto Insurance Mistakes That Can Cost You Thousands in Michigan.
Should You Carry Full Coverage?
That depends on your vehicle, finances, and comfort level with risk.
If your vehicle is financed or leased, your lender will typically require comprehensive and collision coverage. If you own the vehicle outright, you'll generally have more flexibility in deciding whether those coverages make financial sense.
The important thing is to understand what you're paying for and what would happen financially if you had a claim.
At Clear View Insurance, we can review your current coverage, explain your options in plain English, and compare rates with multiple insurance companies.
Have Questions About Your Current Auto Insurance Coverage?
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Clear View Insurance is located in Sterling Heights, Michigan and serves drivers throughout Metro Detroit and across Michigan.