Understanding Full Coverage Car Insurance

a young family poses for a photo inside their car

Full coverage car insurance is a term you might have come across in your search for car insurance. But what does “full coverage” refer to exactly? Keep reading to see our breakdown of what full coverage insurance means, what it covers, and more.

What is full coverage car insurance?

When shopping for car insurance, you won’t actually be able to buy a policy called full coverage because it isn’t a type of insurance. Rather, full coverage is a term often used by lenders, some agents, and others to simply describe an auto insurance policy that meets state insurance requirements and includes comprehensive coverage and collision coverage.

What does full coverage auto insurance cover?

Wondering what full coverage car insurance actually covers? As we noted above, it simply means that comprehensive and collision coverage is included on your policy.

Check out the chart below to see what’s commonly included under full coverage and what it helps pay for. 

If you purchase “full coverage,” you might have…

COVERAGE

DEFINITION

WHERE

Bodily Injury Liability

Pays for others’ injuries resulting from an accident you cause

Required in nearly every state

Property Damage Liability

Pays for others’ property damage (typically a vehicle) resulting from an accident you cause

Required in nearly every state

Uninsured Motorist Coverage

Helps pay for your losses if you’re involved in a crash caused by an uninsured driver

Required in nearly half of the states

Personal Injury Protection

Sometimes called “no-fault insurance,” PIP can help cover medical and related expenses caused by an accident, regardless of fault

Required in a handful of states

Property Protection Insurance

Pays for damage you cause to another person’s fixed property (mailboxes, buildings, parked cars, signs, etc.) with your vehicle

Required in Michigan

Comprehensive Coverage

Sometimes, called “other than collision coverage,” comprehensive insurance helps pay to repair or replace your vehicle if it’s damaged outside of a normal accident (theft, vandalism, natural disaster, animal, etc.)

Not required by state law, but included in “full coverage.”

Collision Coverage

Helps pay to repair or replace your vehicle after a collision with another car or an inanimate object, regardless of fault

Not required by state law, but included in “full coverage.”

What is not included in full coverage?

The term “full coverage” is a little misleading because there are plenty of car insurance coverage options and endorsements not considered part of “full coverage,” such as:

  • Medical Payments Coverage
  • Rental Reimbursement Coverage
  • Roadside Assistance
  • Towing Coverage
  • Uninsured Motorist Coverage (if it’s not mandatory where you live)
  • Personal Injury Protection Coverage (if it's not mandatory where you live)
  • Bodily Injury Liability Coverage (if it's not mandatory where you live)

You should evaluate whether adding any or all of the above coverages makes sense for you and your budget.

Also, even your “full coverage” policy will be subject to limits, deductibles, and exclusions. This means you could still have to pay some money out of pocket after an accident.

Liability vs Full Coverage

Are you a little confused about how liability coverage stacks up against full coverage? Considering full coverage generally includes liability coverage, we totally understand. When you consider liability vs full coverage to determine what’s right for you, make sure you have a good grasp on what liability-only insurance is.

What is liability coverage?

Almost every state requires drivers to carry a basic form of auto insurance, called liability coverage, to protect people from the damages caused by car accidents. Liability insurance usually includes bodily injury liability coverage and property damage liability coverage. These coverages help pay for other people’s financial losses stemming from an accident you cause. Liability coverage doesn’t provide any protection for your own injuries or vehicle damages. When someone has liability only insurance, it means they’re meeting minimum insurance requirements with liability coverage, but they’re not paying an additional amount for comprehensive, collision, or other optional coverages.

When should drivers consider getting full coverage car insurance?

How do you know if purchasing full coverage (i.e., a policy with comprehensive and collision coverage) is right for you? After all, each driver has unique needs. A student driver, mother of three, and military service member living in different states and driving different vehicles might not have the same level and types of coverage. Here are some reasons you might want (or need) a “ full coverage” policy.

  • If you lease or finance your vehicle: If you don’t own your car outright, there’s a good chance your lender will require you to carry comprehensive and collision (i.e. full coverage). Why? Until you pay off the vehicle, they have a financial interest in protecting their investment (your car) if an accident, theft, or vandalism occurs.
  • If you’re in a strong financial situation: Full coverage includes more than the state minimum requirements, meaning your premium will be more expensive. If you can afford to pay for it, the extra protection could help you repair or replace your vehicle after a crash.
  • If your vehicle is newer: New cars are typically more expensive to repair or replace, and full coverage can help protect your ride and your finances in the event of a crash. You don’t want to pay out of pocket to repair or replace a new car.
  • If you live somewhere prone to extreme weather events: If you live in a hurricane-prone area, tornado-prone area, or anywhere else where extreme weather exists, getting full coverage with comprehensive insurance could be wise.

Cost of Full Coverage Insurance

How much can you expect to pay for full coverage car insurance? Well, it depends on where you live, the type of vehicle you drive, and your driving, credit, and insurance history. You can check out our handy chart to compare car insurance costs by state. But generally speaking, the National Association of Insurance Commissioners reports that the national average combined premium (liability average premium + collision average premium + comprehensive average premium) was $1,204 in 2019. While this figure can serve as a good starting point, inflation and other factors are affecting comprehensive and collision rates and you could pay hundreds (or even greater than $1,000) more or less depending on where you reside and what your driving and insurance records look like.

Benefits of Full Coverage for Your Car

If you have full auto insurance coverage, you can rest easy knowing your car is protected from so much chaos you can encounter on the road. In many scenarios, your insurer would help pay to repair or replace your vehicle after an accident, regardless of fault. You would simply need to review with your insurer whether you’re protected from uninsured motorists and determine if adding medical payments, rental reimbursement, roadside, or towing is right for you.

Tips for Saving Money on Full Coverage

Wondering how you can save on full coverage and make your auto insurance policy feel more affordable? Try some of these tips:

  • Maintain a good driving record
  • Try to consolidate or bundle separate policies
  • Drive a less expensive vehicle
  • Shop around for a better rate
  • Search for car insurance discounts
  • Find a flexible payment option that works for you
  • Avoid lapses in coverage
  • Choose a higher deductible

Is it worth it to drop full coverage?

When would you not want full coverage? Here are some reasons you might consider not including comprehensive or collision coverage:

  • If your car is old or inexpensive: Lots of miles and wear and tear typically equate to a car with a lower value. If your vehicle isn’t worth much, paying extra for full coverage might not be worth it.
  • If you don’t have the budget: Paying extra money each month for comprehensive and collision coverage might not be possible for you right now. Consider liability only coverage, and make sure you drive with caution.
  • If you’re not driving much: Work from home? Only have a short commute? The less you’re driving, the less likely you are to be in an accident. If you don’t drive much, you might not need full coverage.
  • If you live in a safe, rural area: Suburbs and small towns generally have less traffic and lower rates of vehicle theft and vandalization. Therefore, you might not want to pay extra for full coverage.

How do I get full coverage insurance?

If you’re interested in a full coverage policy, give us a call, stop by one of our locations, or visit our website for a free quote. We’ll make sure you know what exactly you’re getting, and we’ll work hard to keep your costs low.

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