Full Coverage Car Insurance: An Expert Guide (2024)

The term full coverage car insurance is a bit misleading. Unfortunately, car insurance can’t cover every eventuality. However, full coverage combines liability, collision, comprehensive, and other mandatory coverages to help pay for damages to your vehicle and injuries and damages to others.

Most states require liability coverage, but full coverage is not mandatory. Your lender will require full coverage if you have a car loan or lease, but only some drivers need this kind of insurance. Therefore, you can skip full coverage to save money in certain circumstances.

Let’s dive in and break down full coverage car insurance, who needs the coverage, and how you can save.

What does full coverage car insurance cover?

Almost every state requires drivers to carry a minimum amount of car insurance. Typically liability coverage is needed, and limits are very low. In addition, liability insurance doesn’t cover your vehicle at all. So, many drivers choose to add full coverage to their policies to pay for repairs or replace their cars.

Full coverage isn’t one item you can add to your car insurance policy. Instead, it combines several types of car insurance coverage that provide the most protection for your vehicle.

Full coverage typically consists of the following:

• Bodily injury liability. Pays for the medical costs of others associated with an accident you cause, such as doctor visits, medications, and X-rays. Compare rates from the best bodily injury liability car insurance companies.
• Property damage liability. Property damage liability pays to repair other’s property you damage, including another vehicle or an object like a fence.
• Collision. Collision car insurance pays for damages to your vehicle from an accident, such as hitting another car, fence, tree, or light pole. It also pays for damages from a single-car wreck, such as a rollover accident. Compare the best collision coverage car insurance companies.
• Comprehensive. Comprehensive car insurance pays for your vehicle’s damages unrelated to an accident, including fire, theft, vandalism, and falling debris like hail or tree limbs. It also covers acts of nature, like floods, tornados, and hurricanes.

While full coverage typically includes these coverages, it may consist of other coverages if your state requires them.

What additional coverage may be included in full coverage?

Many states require that drivers carry more than just liability coverage. In that case, any other mandatory coverages are also included in full coverage.

Other types of car insurance coverages that your state may mandate include:

• Uninsured/underinsured motorist (UM/UIM). UM/UIM pays for injuries if a driver hits you with little liability coverage. In some states, UM/UIM also covers property damage. Find the best uninsured motorist coverage car insurance companies.
• Medical payments (MedPay). MedPay helps cover medical costs for you and your passengers after an accident, such as doctor visits and medications. (For more information, read our “What is medical payments coverage in car insurancce?”).
• Personal injury protection (PIP). PIP is similar to MedPay but covers additional costs, such as lost wages, funeral costs, and childcare. Find the best personal injury protection car insurance companies.

Remember, each state has different requirements, so coverages included in full coverage vary. As a result, full coverage in one state may look different than in another. So, if you move, you must know what coverage your state requires.

It’s important to note that full coverage doesn’t include some types of insurance. For example, add-ons like roadside assistance, rental car reimbursement, and Gap insurance aren’t considered part of full coverage. However, most car insurance companies allow you to choose which coverages you need and add them to your policy.

Liability Insurance vs. Full Coverage

Every state determines its car insurance requirements. For most states, those requirements include liability insurance, and a few also require uninsured/underinsured motorist, MedPay, or PIP coverage.

Liability coverage is typically required because it pays for injuries and damages to others if you cause a car accident. However, it’s left up to each driver to decide if they want to purchase extra coverage for their vehicle. That’s where full coverage comes in.

Full coverage not only meets your state’s insurance requirements but also provides coverage for your car. Conversely, if you decide only to carry your state minimum coverage, you may be left with substantial out-of-pocket costs.

For example, let’s say that your car incurs flood damage. If you have full coverage, your car insurance pays for repairs. However, if you have liability-only coverage, you’ll pay for costly repairs yourself.

While no state requires full coverage, it may be necessary if you have a car loan or lease. Lenders determine which car insurance coverages are needed, and most require full coverage to protect their investment. Without full coverage, you would be left paying the entire loan amount plus vehicle repairs or replacement costs.

Does full coverage cover at-fault accidents?

Yes, collision coverage pays for damages to your vehicle if you cause an accident. (For more information, read our “Does my car insurance cover damage to my own car if I am at fault in an accident?“).

However, there are some damages not covered by full coverage. For example, car insurance won’t pay for damages resulting from street racing, driving for rideshare, business usage, or intentional damage. Additional coverage is needed if you want to drive for a rideshare or use your car for business.

How much is full coverage insurance?

Many factors affect car insurance rates, such as:

• Age
• Driving record
• Vehicle make and model
• ZIP code
• Coverage type

For example, drivers pay the most for car insurance if they are young, have a poor driving record, drive an expensive vehicle, or live in areas with a lot of traffic or theft.

The car insurance coverages you choose also affect your rates. Simply put, more coverage means higher rates. But, on the other hand, more coverage equals less out-of-pocket costs if your car is damaged.

Since each state determines coverage and limits, full coverage rates vary widely. This table shows the average monthly minimum and full coverage rates by state.

Average Monthly Car Insurance Rates by Coverage Type

As you can see, car insurance averages can double or triple based on your state. In addition, full coverage raises rates significantly. But remember, more coverage means less money you have to pay if your car is damaged.

Liability vs. Full Coverage Car Insurance Rates

Your car insurance company also affects your rates. Each company uses a formula based on the individual factors above to determine your rates, and they weigh your personal factors differently.

This table shows the top insurance companies average monthly liability and full coverage rates:

Full Coverage vs. Liability-Only Coverage: Average Monthly Car Insurance by Company & Driving Record

Read more: What is Liberty Mutual’s policy on rental car coverage during the claims process?

Since rates differ, shopping around to find the cheapest full coverage car insurance is essential.

Full Coverage Car Insurance Rates Based on Driving Record

Your driving record is one of the most significant factors impacting car insurance rates. It indicates to insurers whether or not you’re a risky driver who is likely to cost them money in claims.

To give you an idea of how much your driving record affects rates, this table shows average monthly full coverage rates from top companies based on driving records:

Average Monthly Car Insurance Rates by Company and Driving Record

Accidents, tickets, and DUIs significantly increase full coverage rates. Since full coverage is the most expensive policy, drivers shopping for bad driving record car insurance may find full coverage too costly.

However, accidents and tickets typically only affect your rates for three to five years, and DUIs affect rates for up to 10 years. So, your full coverage rates decrease after a while, provided you don’t add infractions to your record.

Who needs full coverage car insurance?

Since full coverage isn’t required, it’s up to each driver to determine if additional insurance is needed. While some drivers prefer the added protection, others may only carry the necessary coverage.

Drivers may need full coverage if they:

• Have a car loan or lease
• Drive a new or expensive car
• Live in an area with a lot of traffic or theft
• Live in an area prone to extreme weather
• Can’t afford to pay for repairs themselves

However, some drivers don’t need full coverage. For example, if your car is paid for or you can afford repairs out of pocket, you may not need full coverage auto insurance.

Additionally, if you drive an older vehicle, full coverage may outweigh the cost of repairing or replacing the car. Not only do collision and comprehensive coverage cost more, but you’ll also have to meet your deductible, typically between $500-$1,000. These costs combined may be more than your car’s value.

How can you save money on full coverage car insurance?

As we’ve discussed, full coverage costs more than minimum coverage. Fortunately, there are multiple ways to get lower car insurance rates.

Read more: How to Get Car Insurance: An Expert Guide

Consider Policy Limits and Deductibles

Your policy limit is the total amount your insurer will pay per claim. You can pick your coverage limit as long as it at least meets your state requirement. Similarly, you can choose your deductible, the amount you must pay before coverage kicks in. However, lower limits and deductibles mean higher out-of-pocket costs.

Look for Insurance Discounts

Most insurance companies offer numerous car insurance discounts based on several factors, including the driver, policy, and vehicle. Discount amounts and availability vary by insurer, and most allow you to bundle eligible discounts.

Typical car insurance discounts include safe driver, good student, multi-policy, multi-car, paid in full, and savings for your vehicle’s safety features. However, not all savings are applied to the entire policy. For example, anti-theft discounts only apply to your comprehensive coverage.

Compare Full Coverage Car Insurance Quotes Online

Consider your personal factors, and shop for full coverage auto insurance quotes online from different companies. Since each insurer evaluates your personal factors differently, rates will vary.

For example, avoid adding infractions to your driving record and buy a less expensive vehicle to get lower rates.

Therefore, comparing car insurance rates and discounts from various car insurance companies is critical to finding the cheapest coverage.

Case Studies: Illustrating Full Coverage Car Insurance

Case Study 1: The Cost-Saver

John, a 30-year-old driver with a clean driving record, wanted to save on his car insurance premiums. After evaluating his options, he decided to switch from full coverage to liability-only coverage.

Since he owned an older vehicle that was paid off and he had enough savings to cover any potential repairs, he felt comfortable with this decision. By making this change, John was able to significantly reduce his monthly insurance costs.

Case Study 2: The Comprehensive Coverage

Sarah, a 25-year-old driver, recently purchased a brand-new car and wanted to make sure it was adequately protected. She opted for full coverage car insurance to have comprehensive and collision coverage in addition to liability insurance.

A few months later, Sarah was involved in an accident where her car sustained significant damage. Thanks to her full coverage policy, her insurance company covered the repair costs, minimizing her out-of-pocket expenses.

Case Study 3: The Lender’s Requirement

Mark, a 40-year-old driver, had recently financed a new car through a dealership. As part of the loan agreement, the lender required Mark to maintain full coverage car insurance. Although Mark initially considered liability-only coverage to save on premiums, he had to comply with the lender’s requirement.

While full coverage was more expensive, Mark understood the importance of protecting his investment and ensuring he met the terms of the loan.

Final Thoughts on Full Coverage Car Insurance

Full coverage auto insurance provides the most significant protection, but no states require it. Instead, most states only require liability coverage, which pays for bodily injuries and property damage to others but doesn’t cover your vehicle.

Full coverage generally includes liability, collision, comprehensive, and other required coverage. It costs more than minimum coverage but helps pay for repairs if your vehicle is damaged from an accident or other events, such as theft, vandalism, fire, flood, or falling debris.

It’s worth the extra cost if you drive an expensive vehicle or live in an area with extreme weather, high traffic, and high theft rates. However, full coverage doesn’t include policy add-ons like roadside assistance or new car replacement.

Keep in mind that you may be required to carry full coverage if you have a car loan or lease, but drivers can save on car insurance by adjusting deductibles, adding discounts, and shopping for the cheapest rates.