Updated August 30, 2021|6 min read
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There is actually no car insurance product called “full coverage car insurance.” Instead, the term refers to insurance that includes a full range of coverage. Each car insurance policy is made up of different types of coverage, and a full coverage policy is one that includes both the basic components, like liability coverage, as well as the ones that protect your vehicle from damage, like comprehensive coverage and collision coverage.
If you’re shopping for a new car insurance policy, you’ve probably come across the term “full coverage car insurance” a lot. Let’s take a closer look at all the pieces that includes, and whether or not you need full coverage insurance.
“Full coverage” car insurance isn’t an actual insurance product
Instead, it describes a policy that includes comprehensive and collision coverage in addition to liability coverage
Liability coverage is required by law in most states, while comprehensive and collision are optional coverages
Full coverage car insurance, while not a product itself, refers to a car insurance policy that fully protects both you and your car from accidents and other damage.
A full coverage policy would include not only the coverages and coverage amounts required by law, but also the coverage limits appropriate for your financial situation and additional, non-required coverage types, too, like comprehensive and collision coverage.
Some drivers may also consider roadside assistance, which covers roadside emergencies that leave you stranded on the side of the road, part of a full coverage policy. Let’s take a look at what’s typically included in full coverage car insurance:
|Coverage type||What it does|
|Bodily injury liability||The part of your liability coverage that pays for medical bills and expenses if you've injured someone in an accident|
|Property damage liability||The other part of liability coverage, covers the cost of property damage you've caused in an accident|
|Personal injury protection||Covers medical expenses for you or your passengers after an accident, required in some states|
|Uninsured/underinsured motorist||Covers the costs if you're in an accident caused by a driver with little or no car insurance|
|Comprehensive||Covers damage to your car that happens when you're not driving|
|Collision||Covers damage to your car after a car accident, no matter who was at fault|
Liability insurance is the backbone of most car insurance policies. It’s also required by law in almost every U.S. state. Bodily injury liability covers the costs of any damage or injuries you cause while driving. If you’re the at-fault driver in an accident and the other car is damaged, your property damage liability coverage will pay for the repairs, up to your coverage limits.
➞ Learn more about liability coverage
Personal injury protection, often shortened to PIP, is only required in what are called “no-fault” states. Personal injury protection covers medical expenses for you and your passengers after a car accident, no matter who was at fault. It may also cover extra costs related to an injury, like lost wages. If PIP isn’t required in your state, you may not need it, because health insurance and disability insurance can offer you the same protection.
➞ Learn more about personal injury protection
Ready to shop car insurance?
Uninsured/underinsured motorist coverage is required in some states, but even where it isn’t it offers you important protection. Uninsured/underinsured motorist coverage covers the costs if you’re in an accident caused by a driver without car insurance, or whose car insurance policy doesn’t cover the extent of the damage they caused.
➞ Learn more about uninsured/underinsured motorist coverage
Collision coverage pays for damage to your own vehicle after an accident, regardless of who was at fault. Collision coverage isn’t required by law, but it’s part of what makes up a “full coverage” policy. Collision coverage requires you to choose a deductible, usually of $500 or $1,000. You should get collision coverage if you want to be able to repair or replace your vehicle in case of expensive damage.
➞ Learn more about collision coverage
Comprehensive coverage goes hand-in-hand with collision coverage, and covers damage to your car that didn’t occur while driving. That includes damage from fire, flood, extreme weather, falling objects, animals, vandalism, and theft. Like collision coverage, comprehensive coverage requires a deductible.
➞ Learn more about comprehensive coverage
If your car is totaled, comprehensive or collision coverage will pay you the actual cash value (ACV) of the car, which is its value at the time of the damage, accounting for depreciation. But if you have a loan or lease on your car, you may still owe more than the ACV, so gap insurance pays off the difference so you aren’t stuck making payments on a car you don’t even have anymore. Your lienholder or lessor may require you to include this coverage in your policy.
➞ Learn more about gap insurance
The cost of car insurance varies widely, and depends on lots of individual factors like your age, driving history, ZIP code, credit score, and the make and model of car you drive. That said, we can still look at average costs as a guideline for what many drivers pay for full coverage car insurance.
The average cost of full coverage auto insurance in the U.S. is roughly $1,190 per year (or about $99 per month), according to a 2021 report from the National Association of Insurance Commissioners.
According to the NAIC, this is the average annual premium broken down by different types of car insurance coverage:
|Type of coverage||Average annual cost nationwide|
However, averages can only tell you so much. The truth is that costs will depend on individual factors like the ones we mentioned above, as well as by coverage limits and car insurance companies. Here’s what a sample full coverage policy auto policy might look like:
|Basic Coverages||Policy Limits|
|Bodily injury liability||$50,000 each person, $100,000 each accident|
|Property damage liability||$50,000 each accident|
|Personal injury protection||$20,000 each person|
|Uninsured/underinsured motorist||$50,000 each person, $100,000 each accident|
When we chose these coverage limits for our sample driver, a single, 30-year-old woman in Minneapolis, Minnesota who drives a 2014 Toyota Camry. Progressive quoted her a total of $578 for a six-month policy, which would be $1,156 for a year at the same rate. GEICO quoted her slightly less for near identical coverage, $1,028 for a 1-year policy.
State Farm quoted her significantly more, State Farm quoted her significantly more, at a total of $270.14 a month, which is $1,620.84 for a six-month policy and $3,241.68 for an annual policy.
There isn’t a one-size-fits-all car insurance policy — the right amount of coverage has to do with your personal financial situation and your own comfort with risk.
But an independent insurance broker, like the ones at Policygenius, can help you understand your coverage needs and ensure that you have the right amount of insurance so that you’re not overinsured or underinsured.
Many people don’t find out that they are underinsured until they make a claim and realize it’s not covered, or if someone else makes a claim against them and they end up with a big bill to pay. But being overinsured means you’re paying more each month than you need to be, and that’s not a great outcome, either.
A so-called full coverage policy is one that covers a range of possible costs, from accidents you cause behind the wheel to damage that happens to your car when you’re not even present. Many drivers choose a full coverage policy, one that includes comp and collision, to ensure they’re well protected.
However, if you drive an old clunker and don’t care about repairing or replacing it if it’s damaged, you may not need comp and collision, and might be comfortable with a limited policy that only covers liability.
➞ Learn more about full coverage vs. liability coverage
If you want to save on your full coverage car insurance policy, you can see which discounts you qualify for. Every insurance company is different so check with your provider to see which discounts are available to you. Some of the most common include:
Bundling discounts: You can save as much as 27% by purchasing a car insurance policy with a homeowners or renters insurance policy
Going paperless: You can choose to get your bills and updates via email, not snail mail, for a discount
Affiliation discounts: Your affiliation with certain groups, like the military or educators, can get you a discount at most places
Good student discount: If a full-time students earns a certain GPA or higher, they can get car insurance at a reduced rate
Good driver discount: If you go 3-5 years without tickets and violations, you can see a drop in your car insurance
Switching insurers: Some insurance companies offer a discount if you switch your insurance to them
If you’re leasing or financing your vehicle, you may be required to carry full coverage car insurance. But even if it’s not required, it still makes sense to have full coverage car insurance if you can’t afford to replace your car after a total loss. That way, your comprehensive and collision coverage can pay to repair or replace your car if it’s damaged in an accident you caused, stolen, or damaged by a non-driving peril.
If you can afford to replace your vehicle after a total loss, then you can safely drop your coverage to just liability. Comp and collision also come with a deductible, meaning an amount you have to pay upfront before your insurance will cover you. If your car costs less than your deductible, you can drop comprehensive and collision coverage since you’ll have to pay out of pocket anyway.
Your car insurance rates may go down as your car gets older because cars depreciate over time, but many individual factors can affect your rates. Your driving history, age, and location can all play a role in how your premiums are calculated.
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