Full Coverage Car Insurance Explained

Full coverage isn't an insurance product you'll see listed on your policy documents. Instead, it's a common term that refers to a combination of coverages that go beyond the basic insurance your state requires. While it’s optional for most car owners, it's usually mandatory if you finance or lease your vehicle.

Typically, full coverage car insurance includes liability, collision and comprehensive insurance. Depending on what your insurer offers, you can add other optional coverages, like uninsured/underinsured motorist coverage or personal injury protection.

Full coverage car insurance isn't a specific policy but a term describing a combination of coverages that extend beyond your state's minimum requirements. It typically includes liability (mandatory in most states), collision and comprehensive coverage.

Liability covers damage or injury you cause to others in an accident, while collision covers damage to your own car in a collision. Meanwhile, comprehensive coverage protects your vehicle from non-collision events like theft, vandalism or natural disasters. You can customize your coverage further with optional add-ons.

Full coverage costs vary based on factors like your insurer, location and personal details. Compare quotes from different companies to find the cheapest full coverage car insurance deal. Remember, "full coverage" isn't a standard term, so you might need to select the individual coverages you want when getting quotes.

Full coverage car insurance includes liability insurance, but it goes further by protecting your car, too. So, if your vehicle is damaged in an accident, vandalized or even stolen, you won't have to worry about paying for repairs or replacement out of pocket.

While most states require drivers to carry liability insurance, full coverage is typically only mandatory if you lease or finance your car.

Full coverage car insurance lets you personalize your protection beyond your state's minimum requirements. Your state provides the basic foundation with its minimum liability coverage, but you can build on that to create a policy that fits your individual needs and concerns.

For example, if you live in Texas and worry about hailstorms damaging your car, you can add comprehensive coverage to your liability policy.

Below are some coverages that you can combine for a full coverage car insurance policy:

While full coverage car insurance covers scratches and dents caused by accidents or vandalism, there are some incidents where it may not apply. These typically include:

• Intentional damages
• Damages to the vehicle due to street racing or off-road driving
• Damages incurred while the car is being used in a car-sharing program
• Destruction to or confiscation of the vehicle by the government or other civil authorities
• Use of the vehicle for delivery
• Certain catastrophes like war
• Tire damage from regular wear and tear or hazards like nails and potholes

Always contact your provider to clarify specific policy details if you aren't sure an item is covered.

While most states, if not all, require drivers to have some kind of auto insurance, having full coverage is not mandated by law. However, there are instances when it makes sense to pay extra:

How much car insurance you need depends on whether you have a financed or leased car, a new or expensive car or live in an area with high rates of theft or vandalism. But if you're driving an older car with a low value and could afford to replace or repair it out of pocket, state minimum coverage might be enough to save you money on premiums.

On average, full coverage car insurance costs $1,330 per year, while state minimum coverage averages $615 — a whopping 116% difference.

Full coverage costs more because it offers greater protection. Insurers take on more risk by covering you, your passengers and your vehicle in a broader range of incidents, like accidents, theft or vandalism.

Your premium is calculated based on the types and amounts of coverage you choose, so adding extra protection like roadside assistance or guaranteed asset protection (GAP) coverage will naturally increase your cost.

Check your policy's details on the declaration page to determine if you have full coverage auto insurance. You may also confirm with your insurance provider about the types of coverage your policy has.

If you only have bodily and property damage liability, your policy is liability-only insurance. But if you have additional coverages, including comprehensive, collision and other add-ons, then you have full coverage.

If you have an online account or your insurance provider has a mobile application, you may also see the details of your policy there. Depending on the state where you live, you may also check insurance details in your vehicle registration or with the help of the state Department of Motor Vehicles (DMV).

Understanding full coverage car insurance can be a bit overwhelming, especially for first-time auto insurance policyholders. MoneyGeek answers some frequently asked questions to help you better understand this type of coverage.

Understanding auto insurance will help you make better-informed decisions when purchasing a policy. MoneyGeek breaks down some related terms and concepts that may help you.

• Car Insurance Hub: Search for the best car insurance near you by clicking on the state where you live. MoneyGeek also answers some of the most common questions people ask about car insurance.
• Car Insurance Calculator: MoneyGeek helps you get an estimate on how much your car insurance will cost based on your state, age, gender, credit score, vehicle type and year, driving record and coverage.
• GAP Insurance: Find out what GAP insurance is, what it covers and how it works. This guide also explores when it's best to get GAP insurance.
• Uninsured Motorist Insurance Coverage: Learn more about what uninsured motorist insurance coverage is and whether it is right for you. Find a list of the best insurance companies offering uninsured motorist coverage.
• Uninsured Motorist Statistics: Find a breakdown of the most important facts about uninsured motorists. Learn which states have the most uninsured drivers and how you can protect yourself on the road.
• Best Cheap Car Insurance and Average Costs for 18-Year-Olds: Age can also affect the cost of auto insurance. In this guide, explore the best car insurance ranking for 18-year-old drivers.
• Best Cheap Car Insurance Companies for Seniors: Older adults typically pay lower premiums for auto insurance than other adult drivers. MoneyGeek evaluates the cost of auto insurance for seniors to help you find the cheapest option.