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What Is Full Coverage Car Insurance?

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April 7, 2021

While you’re shopping for auto insurance, you’ll come across many different terms to describe different levels and forms of coverage. Some coverages are mandatory, and others are optional. Some protect you and your vehicle, while other forms protect other drivers and their vehicles.

One of the most common terms you may hear in the insurance world is full coverage insurance. Simply put, full coverage car insurance includes any minimum coverage requirements set in place by your state plus comprehensive coverage and collision coverage.

So, for most states, a full-coverage plan means having the minimum amount of liability coverage, plus some form of comprehensive and collision.

Liability coverage 

Liability coverage is a type of insurance that covers any damages to another person and their vehicle if you are the cause of an accident. There are two main parts of liability coverage insurance: The first part of liability insurance is bodily injury liability coverage. This aspect of your insurance policy covers any expenses of another driver if you’re the one liable for the accident. This includes everything from medical bills, X-rays to post-op visits.

The second part of liability insurance is property damage liability. This aspect covers another driver’s vehicle or property if it’s damaged in an accident you caused. This can include the car, any belongings inside the car, or any property you damaged such as a house or mailbox.

Comprehensive coverage 

The next part of a full coverage insurance policy is comprehensive coverage. This insurance policy protects you and your car in an accident or event that is not collision-related. This includes theft, vandalism, or destruction of property. Comprehensive coverage also covers damage incurred by natural disasters such as hail that could dent your car, hurricanes, falling trees or branches, fire, or any other accidents unrelated to a collision event.

Collision coverage 

Collision coverage is the last aspect of full coverage auto insurance. This form of insurance protects you and your vehicle in the event of a collision-related accident with another vehicle or object. If you hit a guardrail, the side of a bridge, or get in an accident with another driver, collision coverage will help you pay. Other situations where collision coverage would protect you might be if something is lying in the road and causes damage to your car or if you hit a road sign or pole.  

Do I need full coverage car insurance? 

Unlike liability insurance, which every state except New Hampshire and Virginia requires, your state does not require full coverage car insurance. However, there are some cases in which you may need it.

If you have an auto loan or lease, your lender may require you to have full coverage insurance for your loans’ duration. This protects your lender’s assets and assures them that you will protect their goods until you pay them back. Once your loan is paid off and you completely own the car, you can drop your full coverage insurance if you want to.

How do I know if full coverage is right for me? 

While most people drop full coverage once they pay off their vehicle, some choose to keep their car coverage. If it fits your budget, having extra insurance means more confidence for you to live your life! Here are some factors you might consider before dropping your full coverage insurance!

  • If you live in a city: Urban areas have a larger population, which means there are more people on the roads and a lot more traffic. With more drivers comes a greater risk of getting into an accident.
  • If you live in an area known for natural disasters: The auto insurance rates in places like Florida are significantly higher because of the risk for hurricanes and other weather-related damage. If you live in a state with severe weather conditions, you may want to consider extra insurance.
  • If you live in an area with a higher than average crime rate: If the crime rates where you live or where you work are noticeably higher, you may want to consider at least keeping comprehensive coverage in your plan. This way, if your vehicle is damaged or stolen, you are protected, and insurance will help you pay.

What full coverage car insurance doesn’t protect 

Unfortunately, there’s no such thing as “full” coverage insurance. There will always be something you have to pay for. Full coverage car insurance protects only the things within the realm of comprehensive, collision, or liability-related accidents. Here are some things full coverage insurance does not cover.

  • It does not cover your out-of-pocket deductibles fees. The deductible fee is the amount of money you pay before your insurance kicks in. Each policy has different deductible fees, but you will always pay the deductible fee before your insurance pays the rest.

  • It only covers the limit of your specific insurance policy. If your costs exceed the limit, you will need to pay this out of pocket as well.

  • It does not protect you if you are in an accident with an uninsured driver.

  • It does not cover the medical bills of you or your passengers. You will need a personal injury protection plan (PIP) or medical payments coverage plan for this type of insurance.

Typical cost of full coverage

The average cost of full coverage insurance is  $1,134 per year. Liability insurance is the most expensive of the three, averaging around $611 per year. Collision coverage costs an average of $363 per year. Comprehensive coverage is the cheapest, costing only $159 per year.

Liability insurance is mandatory, unless you live in New Hampshire or Virginia. However, if you are a car owner, collision and comprehensive are optional. They can be added or subtracted to your insurance policy based on your individual needs and budget.

Where to get a quote

The biggest tip for saving money on auto insurance is knowing how to shop and where to look. Whether you are brand new to driving or are looking to switch insurance providers, knowing where to look and what to look for can save you hundreds of dollars a year.

How to save money on full coverage insurance 

You’re probably aware of the expenses of car insurance, and the extra expenses that come with your coverage such as deductibles and filing fees. However, you might not be aware of the many ways you can save money on your coverage costs just by looking for discounts! Don’t be afraid to shop around and weigh your options. It’s recommended that you examine at least three different insurance providers to find the best rates for you.

Most insurance providers don’t advertise all of their discounts. Ask if there are any discounts available for paying your annual premium upfront or adding a certain amount of coverage. You can also ask about any discounts that may apply to your occupation, age, etc.

If you own more than one car, you may be able to get a multiple vehicle discount of up to 25% if you insure them with the same provider. If you are actively serving in the military, you may be eligible for a military discount. This discount may even extend to family members or military veterans.

Age is often a determining factor in how high or low your insurance costs are, but it can also be a way to get a discounted insurance rate. There are age-related discounts for the elderly and the young. The mature driver discount applies to those 55 and over who have fairly clean driving records. Some companies offer teenage driving discounts as well. Both of these discounts may need to be supplemented with a safe driving course, but it pays to be safe!

A more popular insurance discount that companies tend to advertise is a bundling discount. When you bundle home and auto insurance, you can often receive significant discounts on both of these rates!

In summary 

Full coverage car insurance includes liability insurance, comprehensive coverage, and collision coverage. In other words, it covers another driver, you, and your vehicle in the case of a car accident, natural disaster, or other crime-related property damage to your vehicle.

It’s up to you whether or not you want to invest in a full coverage plan, but some form of coverage is always a good idea. To explore your options and learn which car insurance is best, explore this guide as well.

>>LEARN MORE: Car insurance policy basics