Broad Form Auto Insurance

The Kind of Bare-Bones Auto Coverage That May Leave Gaps in Your Insurance

Everybody wants to save money on their car insurance, and there are many ways to do it. Lower coverage limits, higher deductibles, and discounts are some of the most common ways to save.

You might even have heard that broad form auto insurance is a way to get the coverage you need without a high price tag. While the term “broad form” implies wide or comprehensive coverage, the opposite is true. Broad form auto insurance is bare-bones coverage that may leave you significantly underinsured. 

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What Is Broad Form Insurance?

Broad form car insurance offers very limited coverage—perhaps only the minimum amount of liability that is legally required in your state—at a low price. If you want to purchase broad form coverage, you need to understand exactly what it does and does not cover. You should also be prepared for gaps in coverage that could be devastating if you have a claim.

Broad form auto liability insurance (also called broad form named operator coverage) covers only one named driver with minimal liability insurance. Coverage is excluded for anyone else who operates the car, under any circumstances.

It is suitable only for drivers who know that no one else will ever drive their car. If you have a family, a significant other, or anyone else who is likely to get behind the wheel of your car, broad form auto insurance is not for you.

If another driver crashes into your car, you will not have coverage for the damage to your vehicle or any other, and you can still be held legally responsible and required to pay. If you crash your own car, you will only have coverage for damage to the other driver’s vehicle and the other driver’s injuries. If your car is damaged or you have injuries, your broad form auto insurance policy will not pay.  

The Gaps in Broad Form Insurance Coverage

Broad form auto liability insurance might be sufficient for you if you have a very old car that would not be worth repairing after an accident. But even under those circumstances, this type of policy has some serious limitations that leave you financially vulnerable.

  • Broad form auto insurance policies provide no comprehensive or collision coverage. You have no coverage for your own injuries or damages to your own vehicle.
  • You may not actually save money. If you get into an accident and are sued for damages, your personal assets will be at risk. Buying a full-coverage policy will probably save you money in the long run, because you will have coverage for a wide variety of situations.
  • You may not have coverage while driving other automobiles or vehicles, such as motorcycles, ATVs, and commercial trucks.

Auto Insurance You Really Need

Most states require that drivers have a minimum amount of car insurance that covers personal injury and property damage liability. Broad form coverage may not even be legal in many states where the minimum amount of coverage required by law exceeds the simple liability protection available in a broad form auto liability policy.

Most people purchase additional auto insurance coverage depending on their needs. A basic auto insurance policy includes several types of coverage, each subject to certain limits and with a premium amount attached.

In order to have sufficient coverage if you have a claim, consider the following auto insurance coverage options:

  • Auto liability insurance includes both bodily injury liability coverage and property damage liability coverage. Bodily injury liability coverage provides protection if you injure or kill someone else while driving your car. It pays for an injured party’s claim for damages, including medical expenses, lost wages, and pain and suffering. It also provides for your legal defense if you are sued. Property damage liability coverage pays for any damage that you cause, such as to another vehicle, a fence, or a tree, and for your legal defense if you are sued.
  • Collision coverage is protection for physical damage to your vehicle when it hits or is hit by another vehicle or object, such as a tree.
  • Comprehensive coverage pays for losses from almost all other types of damage to your vehicle other than that resulting from a collision, such as theft, vandalism, weather, birds or animals, and glass breakage.
  • Uninsured motorist coverage protects you if you are injured by a hit-and-run driver or by a driver who does not have auto liability coverage. It takes the place of liability insurance that the other driver should have, but does not.
  • Underinsured motorist coverage protects you if another motorist is at fault for a collision but does not have enough insurance to cover your losses.
  • Medical payments coverage, or no-fault personal injury protection, is optional in most states and required in others. It helps to pay for medical, dental, and funeral expenses for you or your passengers, regardless of who is at fault. 

Many people choose other options that offer convenient coverage. Rental reimbursement coverage, for example, provides for a rental car if your vehicle is damaged by a covered loss.

Roadside assistance coverage, or towing and labor coverage, pays for help if you are locked out of your vehicle, run out of gas, or face some other type of problem while out on the road. Your insurance company will help you contact tow trucks, locksmiths, or other forms of assistance as needed, and will reimburse you for the costs of these services up to certain limits.

Remember, auto insurance policies have deductibles that you must pay before your coverage kicks in and reimburses you. If you have both comprehensive and collision coverage, you will have a deductible for each.

5 Ways to Find the Right Auto Insurance Coverage on a Budget

Here are some tips for saving money on your auto insurance:

  1. Shop around. A Trusted Choice® independent insurance agent can help you get quotes from multiple insurance carriers to make sure you are getting the best rates available.
  2. Bundle your policies. Most insurance companies offer discounts if you purchase more than one policy from them. And the more policies you have (homeowners, car, boat, motorcycle, personal umbrella, etc.), the greater your discount.
  3. Maximize discounts. Insurance companies usually offer a wide variety of discounts, such discounts for multiple policies, safe driving, and good students. Your agent will work with you to ensure that you receive any discounts that you qualify for.
  4. Keep a clean driving record. Traffic violations have a negative impact on your insurance rates. Avoiding tickets and accidents keeps your rates down, and many insurance companies offer additional discounts for people with clean driving records.
  5. Choose higher deductibles. The higher the deductible, the lower the premium. If you think you will have enough cash to cover your deductible if you have to file a claim, consider a higher deductible to lower your rates.

How to Get the Right Auto Insurance Coverage

Whether you’ve decided that a broad form auto insurance policy is right for you—despite its shortcomings—or you are looking for a well-rounded auto insurance policy, your best bet is to work with an independent insurance agent. A local Trusted Choice agent has your best interests in mind and can work with multiple insurance companies to find the best fit for your needs and budget. Simply find an agent in your area and start getting quotes today.

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