There are three main types of car insurance: liability, collision, and comprehensive. Liability insurance covers other drivers in an accident that's your fault; collision insurance your car damage and replacement fees in a collision; and comprehensive insurance covers other incidents like fires, theft, and vandalism.
While you can buy these coverages separately (liability insurance is required by state law), all three of these coverages together is known as full coverage car insurance. Learn about full coverage car insurance and what you should consider to get the best full coverage car insurance for your needs.
What is Full Coverage Car Insurance?
Full coverage car insurance is an informal term that refers to a combination of state minimum liability, comprehensive, and collision insurance.
Unfortunately, having "full coverage" car insurance doesn't necessarily mean you are covered against everything that can happen on the road. So don't let the term lull you into a false sense of security.
For example, full coverage car insurance generally doesn't include coverage for your own medical bills. For this benefit, you'll need to look for medpay coverage or personal injury protection.
Types of insurance included in full coverage insurance
Full coverage car insurance generally offers the following: state minimum liability insurance, collision insurance, and comprehensive insurance.
Liability insurance: Liability coverage is required by law and covers damage you cause to other drivers, their vehicles, and/or their property. It's crucial to note that liability insurance does not cover your own injuries or vehicle repairs. Additionally, minimum liability insurance requirements vary by state.
Collision insurance: Collision coverage pays for vehicle repairs and replacement if you collide with another vehicle or object. It provides coverage regardless of fault.
Comprehensive insurance: Comprehensive coverage repairs or replaces your vehicle if it's damaged by theft, vandalism, severe weather, falling objects, and more.
Here's a comprehensive overview of the standard car insurance coverages:
| Incident | Comprehensive | Collision | Liability | Full |
| Theft | Yes | No | No | Yes |
| Vandalism | Yes | No | No | Yes |
| Fire | Yes | No | No | Yes |
| Natural disaster | Yes | No | No | Yes |
| Falling objects (tree) | Yes | No | No | Yes |
| Animal damage | Yes | No | No | Yes |
| Collision/accident | No | Yes | No | Yes |
| Rollover | No | Yes | No | Yes |
| Bodily injury/medical bills (other driver) | No | No | Yes | Yes |
| Physical damage (other driver) | No | No | Yes | Yes |
| Property damage (other driver) | No | No | Yes | Yes |
Full coverage car insurance exclusions
While full coverage car insurance offers a broader range of covered instances and benefits, it's important to note where full coverage insurance falls short, so you're not blindsided by uncovered bills.
For starters, full coverage car insurance generally does not cover your medical bills or the medical expenses of your passengers as a result of a car accident you caused. For this coverage, you must add medpay coverage or PIP coverage to your plan.
Some states require drivers to buy uninsured or underinsured motorist coverage, which covers damages and medical bills if you're hit by someone who is not insured or doesn't have enough insurance. This insurance add-on also covers hit-and-run collisions. If this coverage is required in your state, it falls under full coverage, but if it's not, this may be a potential gap in your policy, forcing you to pay out-of-pocket for bills and repairs.
Full coverage auto insurance also leaves a gap for drivers with outstanding auto loans. Because insurance only reimburses you for the current value of your car, factoring in depreciation, you may find your car depreciating faster than you're paying off your loan. For example, if you have an auto loan for $15,000, but your car has depreciated to $12,000, in an accident that totals your car, you'll still be left with a $3,000 outstanding debt after the insurance payout. In these instances, gap insurance covers the difference between your auto loan and your car's current value.
Full coverage car insurance requirements
While states don't require drivers to carry full coverage car insurance, if you lease or finance your vehicle, your lender may require full coverage.
Even if you don't have outstanding payments on your car, getting a full coverage policy is a good idea because it gives you the most protection across the board.
Why Consider Full Coverage Car Insurance?
Protects your investment
Whether you damage or total a car, replacing or repairing it can be costly—especially if it's new or expensive. The collision or comprehensive coverage aspect of full coverage car insurance can help you repair or replace your car after an accident, theft, burglary, or whatever else may happen.
Peace of mind
Full coverage auto insurance offers a broad range of coverages for various types of risks. So you can rest easy knowing you have financial protection in unexpected events, like tree branches falling onto your car.
Full coverage may be required
If you lease or finance your car, your lender will likely require comprehensive and collision coverage. Even if you've bought your car outright, full coverage is still your best option for complete protection.
Is Full Coverage Car Insurance Right for You?
Age and value of your car
Full coverage is often worthwhile for newer or higher-value cars, as they are more expensive to replace. If you drive a 10-year-old clunker, you may be able to skip full coverage, as replacing the car may be less expensive than purchasing comprehensive or collision coverage.
Financial situation
Full coverage is more expensive than liability-only coverage. The average cost of a liability-only policy is $617 while the average full coverage policy costs $1,638. Before buying a policy, be sure you can afford the high premiums.
You'll also have to pay a deductible before your insurer covers your car repairs. You should choose a deductible you can afford if your car needs to be fixed or replaced. The higher your deductible, the lower your premiums.
Your risk tolerance
Different locations have different risks. Carrying full coverage insurance is a smart idea if you drive in a location with a high crime or accident rate, volatile weather, or other hazards.
You should also take into consideration your own driving habits. If you know yourself to be an inconsistent driver or you simply drive a lot each day, full coverage may be a good idea. Additionally, if you share your car with a teenager or new driver, full coverage may be a better option than the minimum liability coverage.
FAQs
Is full coverage car insurance more expensive?
Yes, full coverage car insurance is more expensive than other types of insurance, as it covers a wider array of situations, like collisions and theft.
Can I get full coverage car insurance for an older car?
Yes, you can get full coverage car insurance for an older car, but the costs may outweigh the benefits, as your payout will be limited by the car's cost, including depreciation.
How do I know how much full coverage car insurance I need?
The right amount of full coverage car insurance depends on your state minimum requirements and the value of your car. Talk to an insurance agent to assess your needs and get quotes.
Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
**Enrollment required.
