The name itself isn’t much to go on, but broad form insurance refers to a type of insurance that offers very limited auto insurance coverage for one driver. To understand this coverage more, first, we need to take a step back and understand that most auto insurance policies are basic or broad.
A basic form policy covers fire, explosions, storms, vandalism, smoke, etc. A broad form policy adds coverage for broken glass, water damage, and falling objects.
Broad form insurance is not typically designed to be stand-alone insurance because there’s much that it doesn’t cover. Rather, it’s meant to be a supplemental policy to give you extra coverage.
Broad form insurance can also be called “named operator insurance”, or “operator policy insurance” because it covers just the operator of the vehicle.
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Before we get into the benefits of broad form coverage, let’s run through what this sort of policy does not protect you from. Understanding the limits of your coverage is important because you could put yourself at severe financial risk if something should happen and you’re not properly protected because you did not understand the ins and outs of your coverage.
Broad form insurance does not cover you in the following situations:
Broad form auto insurance only covers one driver, so if you often have family members or friends driving your vehicle, then this coverage is likely not for you.
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Obviously, broad form insurance isn’t meant for everyone, but there are a few instances when it can be exactly what you need—and at a great price.
It’s important to weigh both the risks and the benefits when choosing broad form insurance coverage, and you can gauge the suitability of this coverage for you by asking yourself these questions:
The last point is typically the ideal use case of broad form insurance coverage because it means you’ll be covered in almost every possible situation. Saving money upfront on a lower-cost policy like broad form car insurance can be very tempting, but it’s important to understand the potential risks and what you might have to pay out of pocket if anything happened.
However, there are situations where you simply require proof of insurance coverage, and this is a lower-cost option for that. Driving without insurance is incredibly risky, both legally and financially, so broad form insurance can at least help you obtain insurance quickly and affordably.
Broad form insurance isn’t available in every state, so you might not be able to get this coverage depending on where you live. If you can, make sure you request broad form insurance quotes before you make any decisions. Quotes will help you compare prices so you know exactly what you’ll pay for specific degrees of coverage.
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If you want to see how you’ll save with broad form insurance, you could get quotes for both broad form insurance and standard auto insurance. This tact will also show you the differences in coverage. You may decide broad form insurance is enough, or you may decide that you want full coverage.
It’s also a good idea to get quotes to add broad form insurance to supplement your standard auto insurance policy, especially if you think you might want that extra coverage.
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Choosing broad form liability insurance will save you money versus a regular insurance policy, although it’s important to note it could potentially cost you more in the long run. Regardless, there are a few key ways to save money on broad form insurance quotes:
Remember that the lowest cost insurance isn’t necessarily the best one for you; saving a few dollars in the short term might not be worth it if you have to cover expenses out-of-pocket. Make sure to understand all the risks and benefits of a policy before committing to it.
Car insurance can be expensive, and it’s tempting to try to find a lower-cost option. But comparing a broad form policy to a standard auto insurance policy in terms of cost alone isn’t smart thinking, because the coverage is so different.
Make sure you assess your auto insurance coverage needs and look at the bigger picture before choosing a type of policy.
Broad form insurance is great for certain situations and people, but not ideal for others. If you’re just looking to save money on insurance costs, there are ways to save without sacrificing coverage. But if broad form insurance sounds right for you in terms of the coverage it offers and your driving habits, then it’s a great way to get the coverage you need without overpaying.
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Broad form insurance is limited coverage for one named driver. It can be a standalone policy for very limited coverage or added as a supplementary policy.
Broad form insurance only covers the named driver in their personal vehicle or other vehicles. It covers just the liability of that named driver. For instance, in collisions, broad form insurance covers just the other driver’s injuries and damage to their vehicle.
Hollay Ghadery Hollay Ghadery is a writer and editor who is passionate about financial literacy as a means to personal fulfillment. Hollay has over 18 years of experience creating content about a range of topics related to personal finance, including insurance, investing, banking, and credit cards. When Hollay isn't writing, she's spending time with her four children, two dogs, and three goats.
