Full coverage auto insurance is a package of insurance that includes collision, comprehensive and liability coverage. There is no standard definition for “full-coverage car insurance” and you cannot purchase a policy by using this term.
What is full coverage auto insurance depends on the state. You may be required to have full coverage auto insurance by some lenders or employers.
Full coverage auto insurance is a good idea for many situations. It doesn’t provide the same coverage as you would expect. You’ll need to pay your deductible.
What you should know
Takeaways from the Key Notes
- Full coverage is a term used to describe coverage that includes collision and comprehensive insurance in addition to the state minimum.
- For some jobs, you may need to have full coverage if your vehicle is financed or leased.
- Other policy options include medical coverage, roadside assistance and gap insurance.
- Vehicle owners who want to avoid expensive repairs can benefit from full coverage.
What is covered by full coverage car insurance?
In a full-coverage car insurance policy, depending on the state you live in, there are likely to be several types of coverage: collision, comprehensive, and liability. Understanding what is included in “full coverage”, and how that term is defined, are important.
Liability Insurance
liability helps pay for the injuries and damage to property of another party if you are at fault. Liability auto insurance can cover medical expenses, vehicle repairs and other property damages, as well as lost wages in the event of a lawsuit.
Although liability insurance is required in most states, minimum amounts can vary depending on the type of coverage. For example, bodily injury limits are typically higher than physical damages limits.
| Bodily Liability (injury to or death of a single person) | Death or injury to more than one person | Damages to property | |
|---|---|---|---|
| California | $15,000 | $30,000 | $5,000 |
| Texas | $30,000 | $60,000 | $25,000 |
These limits could be lower than what you would have to pay if you caused an accident. Full coverage can be more than just the minimum coverage required. In California, for example, the minimum bodily injury liability limit is $15,000. The bodily liability limits of a “full coverage policy” may be $100,000.
You can protect your assets better with higher limits. You could lose assets if the other driver sues for damages that exceed your limits.
Collision Coverage
Collision Coverage can be an optional type of coverage in many cases, unless your bank or lender requires it while you are paying off a loan. This coverage covers the cost of repairing your car if it is at fault, for example if you are involved in an accident and hit another vehicle or stationary object such as a mailbox or light pole.
Comprehensive Coverage
Comprehensive coverage covers repairs for your vehicle in the event of damage caused by a cause other than a collision. Many policies will cover damage to your vehicle caused by fires, hailstorms, flooding, falling branches of trees, breaking glass, being hit by an animal, burglary, theft and more.
Note:
Full coverage auto insurance can include low deductibles. This is the amount that you pay to cover damage before your insurance kicks in. It might have a $500 deductible for collision and $250 for comprehensive.
Additional Coverage by State
4Â These coverage types can also be included with any full coverage auto insurance policy.
- Uninsured/underinsured motorist coverage: Some states require you to carry uninsured/underinsured motorist coverage to pay your costs if you’re hit by a driver without insurance and are hurt or have property damaged. States may require insurance companies to offer this coverage. You can decline it.
- Personal Injury Protection (PIP),: No one is responsible for the coverage Personal Injury Protection (PIP),, which pays your medical expenses, funeral costs, and economic losses due to lost work or needing assistance around the home. This insurance is mandatory in some states that are “at-fault”. Some states require insurance companies to offer this coverage, which you can decline.
What full coverage car insurance doesn’t cover
You should understand that you are not fully protected against all risks by having full coverage. Examine all options for car insurance to see what is included. Exclusions are listed in all policies, and include:
- Wear and tear damage: This is a cost-free repair.
- Gap Insurance: In the event that you have to total your leased or financed car and owe a balance greater than its value, Guaranteed Auto Protection (GAP) insurance can pay for it. GAP insurance may be required by some lenders or insurers.
- Rental Car Reimbursement: This coverage will help cover the costs of a car rental if you are involved in an accident covered by your policy and need repairs to your vehicle.
- Roadside Assistance or Towing If you are out of gas or locked out of your car, have a dead battery or need any other assistance on the roadside, roadside assist will get you assistance and lower the cost.
- New Car Replacement If you total your car within the first 12 months, the new car replacement policy will replace it with a car of equal value. The depreciation will not affect your settlement.
Cost of full coverage car insurance
According to a report by the National Association of Insurance Commissioners in 2023, the average cost of auto insurance in the United States (defined as collision, comprehensive, and liability) was $1,176 annually in 2019-2020.
Your premium will be determined by a number of factors, which are determined under state law. These include:
- Personal characteristics Age, driving experience gender, location and marital status
- Coverage : Types of coverage, limits, deductibles and previous insurance coverage
- History:Claims History, Credit History, Driving Record
- Auto: Miles driven, vehicle type, vehicle use
Comparing several quotes is the best method to find out how much full-coverage will cost. Quotes are available on the websites of insurance companies. Check out our list of the best car insurance companies in 2024.
Note:
Your auto loan may allow you to finance the first year’s premiums for full coverage auto insurance.
When do you need full coverage car insurance?
When you lease or finance a car, full coverage insurance is often required. Lenders or leasing companies will require proof of full coverage on your vehicle for the entire term of your loan. The lender will buy the insurance for you if you do not have it.
You may also need full coverage:
- Do not drive an expensive vehicle that may be costly to fix
- Regularly commute in heavy traffic
- Repairs are expensive or you prefer to avoid paying for them.
- You live in an area that is high-risk due to the weather, crime or other factors such as animals or overgrown tree.
- You have assets that you want to protect at higher limits
Why you don’t need full coverage car insurance
Once your car is paid for, you won’t need to have full coverage. You can decide if you’d like to continue with collision and comprehensive coverage.
You probably won’t require full coverage auto insurance if you:
- The actual value of your car does not justify insurance costs.
- There are few vehicle damages.
- You prefer to pay out-of-pocket for repairs.
- If your car is damaged, you would rather purchase a new vehicle.
When can you drop full coverage car insurance?
Once you have paid off your auto loan, you can cancel collision and comprehensive insurance. You may still want to keep these coverages, however, if you have a more expensive car.
Does full coverage car insurance cover at-fault accidents?
Full coverage auto insurance pays for the repair of your vehicle when you are at fault in an accident. In most states, however, this insurance does not cover bodily injury to you or your passengers. In states with “no fault” insurance, bodily injury coverage is included in your policy up to the limit purchased.
Does comprehensive car insurance cover the same as full coverage?
Comprehensive coverage is one part of full coverage. Comprehensive coverage includes damage to your car caused by events other than collisions, such as hail, fire or flood. Theft and vandalism are also covered. Full coverage is a policy which includes the state’s required insurance as well as collision and comprehensive coverage.
What are the disadvantages of full coverage?
The disadvantages of full coverage insurance include higher costs than liability coverage. It may also give the impression that it covers everything. You may also want to consider adding other types of insurance to your policy, such as personal injury protection insurance (PIP) or guaranteed auto protection insurance (GAP).
The Bottom Line
You’ll need to have full coverage if you are financing or leasing a car. You may also want to consider it if the car you have is expensive or you are at high risk of damage. Or, you simply need peace of mind. It is important to look beyond the “full coverage”, in order to make sure you receive all of the protection you require. This includes adequate limits and coverage.
SOURCES OF ARTICLE
Adsrocks’s writers are required to use primary resources to support their writing. White papers, government statistics, original reporting and interviews with experts in the industry are some of these sources. Where appropriate, we also refer to original research by other reputable publishers. Our editorial policies will tell you more about our standards for producing accurate and unbiased content.
- State of California Department of Motor Vehicles. “Insurance Requirements.”
- Texas Department of Insurance. ” Automobile Insurance Guide.”
- California Department of Insurance. ” Automobile coverage limits.”
- Progressive. ” Car Insurance requirements by State.”
- National Association of Insurance Commissioners. Auto Insurance Database Report.
