Our guide covers what broad form insurance is, how it compares to other coverages, when it’s most beneficial to have and its top insurance carriers
Updated:
May 15, 2024
Written By:
Daniel Robinson
Daniel Robinson
Writer
Edited By:
Rashawn Mitchner
Rashawn Mitchner
Senior Editor
If you’re looking to lower your car insurance costs, insure yourself or drive an older vehicle, broad form insurance might be right for you. This guide covers what broad form insurance is, situations where it makes sense to have and other standard insurance options you can choose. We’ll also suggest some of the best auto insurance carriers to consider for a new policy.
Key Takeaways:
- Broad form is a type of car policy that covers one driver with liability insurance.
- Unlike other liability car insurance policies, you cannot add another driver to this policy.
- It works best if you own an older vehicle or have money to pay for damages after an accident.
- Broad form insurance policies allow you to add personal injury protection (PIP) and uninsured/underinsured motorist coverage.
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What Is Broad Form Car Insurance?
Broad form car insurance is a liability-only policy that covers only one driver. Liability insurance is a coverage most drivers have to get because their states require it.
A liability insurance policy doesn’t cover the bodily injuries or property damages to the actual policyholder. It will cover the medical bills and vehicle damages to other drivers and parties involved in the accident the policyholder causes. This makes it to where the policyholder doesn’t have to pay for these things out of their own pocket if they’re found at fault for an accident.
What Does Broad Form Insurance Cover?
It meets your state’s minimum liability car insurance requirements. There are three aspects of this, such as:
- Bodily injury liability per person: This covers the medical expenses and lost wages to other drivers and their passengers involved in an accident you caused.
- Bodily injury liability per accident: This is the maximum amount your insurance company pays for bodily injuries to other affected parties after an accident.
- Property damage liability per accident: It pays for damages done to other vehicles or personal properties (fences, dwellings) after an accident. It can also cover your court costs.
Some carriers also will allow you to add personal injury protection and uninsured motorist coverage to your broad form car insurance, both of which can help lower out-of-pocket expenses by covering your medical bills and paying for damage done to your vehicle.
How Is Broad Form Insurance Different From Standard Liability Insurance?
If you have another driver listed on your policy, and they cause an accident, your standard liability insurance policy will cover the damages to the other parties in the accident. However, under a broad form insurance policy, only one policyholder can be listed. So if someone else was driving your car covered by a broad form policy and caused an accident that hurt someone else, your broad form insurance wouldn’t cover it.
Either you or the driver that caused the accident would have to pay any medical bills, repair costs or legal fees completely out of pocket for the other parties that fell victim to the accident.
Limitations of Broad Form Insurance Coverage
Broad form insurance is bare-bones coverage designed to cover one driver so he or she can meet your state’s minimum requirements. It won’t cover the following:
- Damage to your vehicle: Since you’re unable to add collision and comprehensive insurance to this policy, you’ll be on the hook to pay for any repairs your vehicle needs after a car accident. The only exception is if you have coverage to protect you against an uninsured motorist.
- Medical bills: You’ll also have to pay for medical expenses you incur. One way around this is to add PIP, which covers hospital stays, surgeries and more. However, it only works if you live in Delaware, Oregon or one of the 12 “no-fault” states offering PIP.
- Other drivers: If other people drive your vehicle and they cause an accident, you’ll pay for the damages. Not your car insurance company.
- Certain vehicles: Insurance companies don’t offer broad form coverage for RVs or company-owned vehicles.
- Theft: If you leave a laptop or other valuables in your vehicle and someone steals it, your policy won’t cover it. However, renters’ or homeowners insurance may pay.
- Damage from climate events: These policies don’t cover damages done to your vehicle resulting from fire, tornado, hail, water and falling objects.
How Does Broad Form Insurance Compare to Other Coverages?
When shopping for insurance, it’s imperative to compare the different types to find which one offers you the best coverage at an affordable price.
Broad Form Insurance vs. Limited Form Insurance
Michigan offers its drivers limited collision insurance if you’re not at fault. That said, if you cause the accident, you must pay for damages done to your automobile. Broad form car insurance is liability coverage, meaning it only covers damage done to other vehicles. If you’re involved in an accident and your car requires repairs, you’re responsible.
Broad Form Auto Insurance vs. Standard Car Insurance
Standard car insurance offers more protection than just liability. You’ll receive coverage through your collision policy to repair or replace your vehicle when it’s damaged in an accident, regardless of who’s at fault.
And if your motor vehicle gets damaged from wind, theft, vandalism, fire, floods or tornadoes, you’ll receive financial protection to cover these repairs through comprehensive coverage. Both collision and comprehensive coverage are a must if you lease or finance your vehicle, as lenders require both policies with a lower deductible.
Full coverage also pays for medical expenses for you and your passengers. The coverage varies based on your state. If you live in a no-fault state, you’ll have access to PIP. In at-fault states, you have access to medical payments coverage. Both cover medical expenses for doctor’s visits, X-rays, nursing services, funeral bills for survivors and more.
Also, there are overlaps in coverages between full and broad form insurance. Both have liability policies to cover injuries and repair costs other drivers get from an accident. You can also add uninsured motorist protection (UM) to your broad form insurance, which is standard with full coverage. With UM, you’ll receive coverage to pay for repairs for your vehicle and medical expenses if an uninsured motorist caused the collision.
Most importantly, full coverage allows you to have more than one driver on the policy. Sure, your insurance cost is higher than what you’d pay with broad form insurance, but you’ll also minimize your potential out-of-pocket expenses.
Here are the six standard types of car insurance coverage:
Car Insurance Add-Ons
Along with the six types of coverage, here are some additional services you can buy:
- Emergency roadside assistance: It covers things such as replacing a flat tire (if you have a spare), jump-starting a dead battery, towing to the nearest repair shop, helping if you get locked out of your car and giving you a gallon of gas if you run out.
- Rental car reimbursement: If your vehicle lands in the repair shop for an approved claim, rental car reimbursement pays for transportation expenses while you wait to get your vehicle back. It includes public transportation and rental car expenses. It won’t cover tolls, gasoline or a security deposit.
- Gap insurance: When an accident totals your vehicle, your insurance company pays the actual cash value of your automobile. If that amount is lower than the amount you owe on your car loan or lease, gap insurance pays the difference to prevent you from paying out of pocket to fulfill your financing agreement.
When Should You Get Broad Form Insurance?
There are a few instances when broad form car insurance makes sense:
- You only need to insure yourself
- You want minimal coverage that keeps your vehicle legal
- You don’t have children
- You own a low-value vehicle
- You own multiple cars
When Shouldn’t You Get Broad Form Insurance?
You shouldn’t buy broad form insurance in the following circumstances:
- You have a higher-value vehicle and don’t have money on hand to pay for repairs or replacement costs
- You have multiple drivers on your policy
- You’re financing your vehicle
- You’re driving an RV or company-owned vehicle
Which States Offer Broad Form Insurance Coverage?
You can buy broad form car insurance in:
What Is Broad Form Insurance Coverage? The Bottom Line
It’s a car insurance policy that covers a single driver. Like a liability insurance policy, it offers the minimum requirements to be compliant with your state law. And it covers damage done to another driver’s vehicle and helps pay for their medical expenses up to your coverage limits.
Broad form insurance helps you save money but doesn’t cover any damages done to your vehicle or pay for your medical expenses. In turn, it works best if you own your vehicles and they’re lower in value. Overall, it’s a smart way to get cheap car insurance premiums if you don’t mind paying out of pocket for repairs.
Top Auto Insurance Recommendations
Getting different auto insurance quotes is the easiest way to save money on your policy. It helps you find the best insurance rates and the right financial protection. These are two of the best providers:
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State Farm
State Farm is among the best insurance carriers for drivers because of its unique insurance coverage. You can buy either a liability- or full-coverage option. You can also add policies if you do ridesharing for work, require emergency roadside assistance or if you have a sports car requiring financial protection.
You can also save money thanks to its many discounts. Bundling more than one policy with State Farm can save you up to 30% on your insurance premiums. It also offers discounts for full-time students with a B average or above. You can also use its Drive Safe & Save app to have State Farm monitor your driving behaviors. If you display safe driving skills, you can save up to a 30% discount on your policy.
Read more: State Farm Insurance Review
Travelers
Similar to State Farm, Travelers offers a lot of coverage options to fit your needs. Along with liability- and full-coverage options, you can add loan or lease gap insurance. It also offers emergency roadside assistance.
You can save through a wealth of discounts the provider offers. You’ll receive up to a 10% discount if you bundle your auto with home or renters insurance. If you haven’t had a moving violation or accident in the past three years, you could qualify for its safe driving discount. Ultimately, Travelers offers easily attainable discounts to make it worth a consideration.
Read more: Travelers Insurance Review
What Is Broad Form Insurance Coverage?: FAQ
Below are frequently asked questions about broad form insurance coverage.
Basic form insurance means you receive coverage specifically outlined in your policy. Those circumstances are called “peril.” Broad form insurance works more like liability in that it covers other drivers’ property damages and medical bills when an accident occurs.
No, it isn’t full coverage. It’s auto insurance designed for a single driver to meet the minimum requirements in your state. It won’t cover any other drivers in your household or any damage your vehicle receives from a collision.
It is a no-frills car insurance designed to offer the minimum coverage for drivers. Not only will you save money on your premium, but it can minimize out-of-pocket expenses you might incur if you cause an accident and the other driver has property damage or medical bills.
Yes, it can be a cheaper car insurance policy because it only covers one driver. However, with basic coverage, you can cover more than one driver. Your insurance costs depend on where you live, the type of vehicle you want to insure, your driving history, your credit score and other factors. That’s why obtaining multiple insurance quotes is the smart way to go so you can compare prices.
Our Methodology
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Here are the factors our ratings take into account:
- Industry standing (20% of total score): Our research team considered market share, ratings from industry experts and years in business when giving this score.
- Availability (10% of total score): Auto insurance companies with greater state availability and few eligibility requirements scored highest in this category.
- Coverage (30% of total score): Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
- Cost and discounts (25% of total score): Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities were both taken into consideration.
- Customer experience (15% of total score): This score is based on volume of complaints reported by the NAIC and customer satisfaction ratings reported by J.D. Power. We also considered the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.
Our credentials:
- 800 hours researched
- 45 companies reviewed
- 8,500+ consumers surveyed
*Data accurate at time of publication.
If you have feedback or questions about this article, please email the MarketWatch Guides team at editors@marketwatchguides.
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