Question: Can you be denied full coverage insurance?

Answer: If you want collision and comprehensive coverage (often referred to as full coverage) on your vehicle and your current car insurance company refuses your request, you should comparison shop and purchase the auto insurance policy elsewhere.

Coverage offerings and rates vary greatly from one insurance company to the next, and this allows motorists to find an affordable auto insurance policy that includes the coverage they want.  Underwriting rules and guidelines also differ from insurer to insurer.

For instance, some car insurance companies limit how old a vehicle they will cover with comprehensive and collision.  If your vehicle is beyond its limit, such as 20 years, you will be offered only liability coverages.

Some auto insurance providers will offer car owners full coverage if their vehicle has dents and scratches or other minor damage, as long as it is documented and the policyholder understands he or she cannot claim for this pre-existing damage. 

Other car insurance carriers will at first refuse your request for comprehensive and collision coverage if your vehicle has existing damage, but will allow you to add full coverage once documentation and an inspection shows that necessary repairs were made. 

And still, other auto insurance companies won’t offer you a full coverage period if a vehicle has existing coverage or existing damage that is over a certain monetary amount.

When an insurance company won’t insure a vehicle due to damage, it’s not trying to criticize a person’s choice in an older car that shows its age. It’s a business decision.  If the car were in an accident it would be difficult to discern old damage from new, thus causing issues with claims.

There is also the issue of insurance fraud.  Dishonest individuals sometimes buy a beat-up older vehicle for a song and then put comprehensive and collision on it and later try to make a claim for pre-existing damage.  Fraud like this can end up costing honest auto insurance policyholders, like you and your mother, more in premiums.

—Penny Gusner contributed to this story.

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Contributing Writer

Shivani Gite is a personal finance and insurance writer with a degree in journalism and mass communication. She is passionate about making insurance topics easy to understand for people and helping them make better financial decisions. When not writing, you can find her reading a book or watching anime.