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Ask ERIE: What is full coverage?

by Erie Insurance on October 14, 2024

If you’ve ever bought or leased a car, you may have been told you need “full coverage” auto insurance while under a loan or lease. What does that mean?

Honestly, there is no such thing. It is not a term generally used by insurance companies, because no insurance company will be able to cover 100% of all situations. The definition of full coverage is going to vary largely by the person and the situation. The definition is open to interpretation, but let’s take a bit of a deeper look at each perspective:

State Regulations

Many states require a certain amount of insurance to be purchased to legally drive within the state (usually referred to as “state minimum coverage”). The coverages most states require are:

  • Liability Coverage. This coverage is designed to protect you if you’re found to be at fault in an accident. It can cover the other driver’s medical costs, lost wages, pain and suffering, repair or replacement of their vehicle or property, and even some legal bills. This coverage does not cover your medical expenses, lost wages or vehicle damages.
  • Uninsured or Underinsured Motorist Coverage. This coverage requirement varies by state but is used when you’re in an accident caused by another driver who is either uninsured or does not have enough coverage.
  • Personal Injury Protection. This is also required by certain states. It’s meant to help cover your and your passengers’ medical bills sustained during an accident.

Lenders and Financial Institutions

Lenders have a financial interest in the vehicle they issue a lease or loan for.

So, when they talk about full coverage, they want to make sure the vehicle is protected in the event of an accident. These coverages are optional if you own your vehicle but are often required by lenders:

  • Collision Coverage. This coverage protects your vehicle (minus your deductible, and up to market value) in the event of a collision with another vehicle or an object such as a barrier.
  • Comprehensive Coverage. This covers your vehicle (minus your deductible, and up to market value) in the event of an accident that is not related to a collision, such as a deer running into your car, theft or vandalism.

Policyholders

No one likely wants more out of their insurance than the one who actually uses the vehicle. So, when you personally say full coverage, you may also be thinking of a wide list of additional coverages such as:

  • Rental Car coverage.[1] After an accident, this is designed to ensure you receive a rental car while your car is being repaired.
  • Roadside Service.[2] This can help save the day by helping cover the expense of retrieving you and your vehicle when your car breaks down.
  • Auto Security.[3] An auto endorsement that ensures you have adequate coverage to replace your new ride should it end up totaled. With this endorsement, if your new car (less than two years old) is totaled, ERIE pays to replace it with the newest model year. If your vehicle is older than two years, it will be replaced with a model up to two years newer.

How Do I Know What Type of Coverage I Need?

Call your ERIE Agent and have them walk you through your options to determine the best ways to get enough coverage for your needs while staying within your budget.

Do you have the coverage you need?

Discover great rates from local people who care. Get a free quote now.
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ERIE® insurance products and services are provided by one or more of the following insurers: Erie Insurance Exchange, Erie Insurance Company, Erie Insurance Property & Casualty Company, Flagship City Insurance Company and Erie Family Life Insurance Company (home offices: Erie, Pennsylvania) or Erie Insurance Company of New York (home office: Rochester, New York).  The companies within the Erie Insurance Group are not licensed to operate in all states. Refer to the company licensure and states of operation information.

The insurance products and rates, if applicable, described in this blog are in effect as of the article’s publish date and may be changed at any time.

Insurance products are subject to terms, conditions and exclusions not described in this blog. The policy contains the specific details of the coverages, terms, conditions and exclusions. 

The insurance products and services described in this blog are not offered in all states.  ERIE life insurance and annuity products are not available in New York.  ERIE Medicare supplement products are not available in the District of Columbia or New York.  ERIE long term care products are not available in the District of Columbia and New York. 

Eligibility will be determined at the time of application based upon applicable underwriting guidelines and rules in effect at that time.

Your ERIE agent can offer you practical guidance and answer questions you may have before you buy.

  1. 1. 
    The six classes of rental car options are not available in Virginia or North Carolina. Transportation expenses are included in Virginia with comprehensive coverage and is optional with collision. Transportation Expenses for theft claims are included in North Carolina with comprehensive coverage. The limit is $15 per day and up to $450 per loss. Higher limits, other causes of comprehensive loss, and collision is optional. Vehicles eligible for coverage include cars, light trucks and motorcycles. The service also covers horse, livestock and other trailers that are pulled by vehicles that ERIE insures. See individual policies for specific coverage details. Certain terms and limitations may apply.
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  2. 2. 
    Roadside Service coverage is only available when either comprehensive or collision coverage has been purchased on the vehicle. In North Carolina, Towing and Labor Service Coverage is only available when comprehensive coverage has been purchased on the vehicle. Limitations apply in Virginia. In North Carolina, coverage is purchased by limits ($25, $50 and $100).
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  3. 3. 
    The endorsement is sold on a per-vehicle basis, not per policy, and contains the specific details of the coverages, terms, conditions and exclusions. Coverage is not available in New York or North Carolina. Eligible vehicles must carry both comprehensive and collision coverage and replacement must be made with a comparable model. See individual policies for specific coverage details. New vehicle replacement and better vehicle replacement do not apply to leased vehicles. Auto lease/loan component and repair coverage applies to a leased vehicle. Coverage does not include items such as overdue payments and carry-over balances from previous leases/loans, etc. When payment is made under new vehicle replacement or better vehicle replacement, auto lease/ loan or repair coverage will not apply. Insurance products are subject to terms, conditions and exclusions not described here. Ask your ERIE agent for details.
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