Vehicle insurance is meant to protect you financially from potential losses involving your vehicle. A vehicle insurance policy can include many different types of coverage, some of which you’re required to have here in North Carolina, others that are optional. Full coverage protection contains several of these coverages, which will be explained below. State law here in N.C. requires that drivers have minimal liability protection, with minimum amounts required, as well as uninsured and under-insured motorist coverage.

Third Party Liability Coverage

Liability protection, which is required by law and basic to all vehicle policies, has three parts with the following minimum amounts of protection required:

  • Bodily Injury – $30,000 per person for each accident
  • Bodily Injury – $60,000 for all persons for each accident
  • Property Damage – $25,000 for each accident

This liability coverage represents the maximum amount your insurer will pay to a third party suffering losses from an accident for which you’ve been found to be at fault. It pays nothing to you for damage or injuries.

You’ll also notice that these minimum amounts would likely be inadequate to cover actual costs for damages and/or injuries in an actual accident. Costs above these amounts must come out-of-pocket. You should consider increasing these minimum amounts of protection.

Optional Coverage Available

“Full coverage” is not a type of insurance policy, but a term often used to describe a policy with physical damage or some other optional coverages added. A policy may be considered full coverage if it contains liability protection, collision and comprehensive. Liability pays towards losses you may cause others while collision and comprehensive pay for damages or losses to your car in either a collision or non-collision event.

Collision Insurance – Covers damages done to your vehicle when involved in a collision with another vehicle or a stationary object such as a guardrail or light post. Basically, this covers the vehicle whenever it’s in motion.

Comprehensive Insurance – Covers loss of or damages to your vehicle as a result of an event other than a collision. An exception is that this is the coverage that pays toward damages caused by your vehicle colliding with an animal, such as a deer running across the road. Some losses or damages covered include:

  • Theft
  • Fire
  • Natural disasters such as floods, earthquakes, storms, hurricanes, tornados, etc.
  • Riots
  • Vandalism
  • Fallen objects
  • Broken glass

An incredibly important part of the liability/collision/comprehensive full coverage policy are the amounts of liability protection. Consider an umbrella policy.