What is full coverage? Understand your Insurance

When people talk about "full coverage" car insurance, they're often referring to a combination of coverages that help protect a vehicle. But, there's really no such thing as "full coverage" for your car.

Some coverages (such as auto liability) are required by state law. Others (such as rental reimbursement) may be optional, depending on the insurer and your situation. So, it's up to you to choose car insurance that fits your needs — making sure your coverage meets state requirements and helps you protect your car.

Car insurance coverage options at a glance To start, it may help to understand common types of car insurance coverage and whether they're required or optional. Check out the following chart, then get explanations on what each coverage does below.

Type of Car Insurance Coverage Required or Optional Liability Coverage

• Bodily injury liability

• Property damage liability

Required Comprehensive Coverage

Optional (unless you lease or finance your vehicle)Collision CoverageOptional (unless you lease or finance your vehicle)Medical Payments Coverage/Personal Injury ProtectionRequired in some statesUninsured and Underinsured Motorist CoverageRequired in some statesRental Reimbursement CoverageOptional

Liability Coverage Liability coverage is typically included in all auto insurance policies, as it's required by law in most states. Bodily injury liability coverage helps pay for another person's medical expenses if you cause an accident. Property damage liability coverage helps pay for damage you cause to another person's property in a car accident. Each state sets minimum liability coverage limits that drivers must purchase. Typically, the liability coverage in an auto insurance policy will contain three limits:

• The maximum payment for bodily injury per person

• The maximum payable for bodily injury per accident

• The maximum payable for property damage

You may want to go beyond the state requirements and buy a policy with higher liability limits. Higher coverage limits typically mean you'll pay higher premiums, but you'll have more protection if you cause an accident.

Comprehensive and Collision Coverage If you are still paying off an auto loan or if you have a lease on your vehicle, your lienholder or financing company usually requires collision coverage and comprehensive coverage. Otherwise, if your vehicle is paid off, these two coverages are typically optional on a car insurance policy. Collision coverage helps pay to repair or replace your vehicle if it's damaged in a collision with another vehicle or object (such as a fence). Remember, collision coverage helps protect your vehicle, while property damage liability helps pay for damage you cause to another driver's vehicle. Comprehensive coverage helps pay to repair or replace your vehicle if it's stolen or damaged by things like hail, animal damage or vandalism. Comprehensive and collision coverage each have deductibles and limits. A deductible is the amount you pay out of pocket toward a covered claim. A limit is the maximum amount your insurance will pay out for a covered claim.

Rental Reimbursement Coverage Rental reimbursement coverage helps pay for a rental car while yours is being repaired after a covered loss. Be sure to check the coverage limits — typically, rental reimbursement pays up to a certain dollar amount per day, for a set number of days.

Uninsured and Underinsured Motorist Coverage Uninsured motorist coverage helps protect you against drivers without insurance. If you're injured in an accident caused by another driver, that driver's liability insurance will usually help cover medical expenses you incur — unless that driver doesn't have auto liability coverage. In that case, your uninsured motorist coverage would help pay for expenses related to your injuries. Underinsured motorist coverage works similarly: It takes effect if the other driver who caused the accident has insurance, but their liability coverage limits are lower than the limits that trigger underinsured motorists coverage in your state. Check your state's insurance requirements or ask your agent for more information about this coverage.

Medical Payments Coverage or Personal Injury Protection Medical payments coverage helps pay for your (or your passengers') medical expenses after an accident, regardless of who is at fault. Covered expenses may include things like surgery or X-rays. Personal injury protection (PIP) isn't available in all states, but it's required in some states. PIP works similarly to medical payments coverage — it helps cover your medical expenses resulting from a covered loss. In some cases, it may also help you pay for other expenses while you're healing. These expenses may include child care services and lost income as a result of your injuries.