What Is “Full Coverage” Car Insurance? (2024 Guide)
Full coverage automobile insurance includes a combination of liability, property damage, and other coverages. However, this terminology can be misleading — “full coverage” is an all-encompassing term that can mean many things to consumers and car insurance companies. Understanding the individual coverages that make up your auto insurance policy can prevent confusion and ensure you have the auto insurance coverage you need in the event of a claim.
Key takeaways
- A standardized “full coverage” policy does not exist.
- “Full coverage” auto insurance comprises many coverages and limits.
- Coverage options can vary by state and insurer.
- Some auto insurance coverages are mandatory.
- Understanding the available coverage options is the key to securing the best “full coverage” auto insurance coverage for your needs.
What does “full coverage” car insurance cover?
While “full coverage” is more of a general term than a standardized definition. “Full coverage” auto insurance is a term commonly used to mean providing liability protection for you and physical damage protection for your vehicle in one auto insurance policy. Additional coverage may be included.
“Full coverage” automobile insurance will vary from person to person and company to company but is generally made up of the following coverages:
- Bodily Injury (BI) liability coverage provides a specified dollar amount of coverage if you are held liable for injuries to others in an automobile accident. This will be stated as two numbers: the amount your insurance will pay per person injured and the maximum amount for all injuries for which you are liable. Bodily injury coverage may also pay for legal fees related to the claim.
- Property Damage (PD) liability coverage details the maximum dollar amount your insurer will pay for property or vehicle damage for which you are liable.
- Comprehensive auto insurance coverage, often called other-than-collision, protects against damage to your automobile caused by an event other than a collision with another vehicle. Examples include accidents involving animals, glass breakage, damage from flying objects, theft, vandalism, hail, and other damage outside your control.
- Collision auto insurance coverage is the coverage most people think of when considering auto insurance. Collision insurance covers the cost to repair or replace your vehicle in a collision with a car or other property, such as a tree or fence.
- Additional Coverage options include coverages that may not typically be considered part of a “full coverage” policy but provide coverage options for extra expenses. Examples include Personal Injury Protection (PIP) and Medical Payments, both of which provide medical payment coverage for out-of-pocket medical bills; Roadside Assistance, which includes towing and other breakdown assistance; Rental Car Reimbursement; Uninsured Motorist coverage; and Underinsured Motorist coverage that protects against uninsured or uninsured drivers.
“Full coverage” car insurance vs. comprehensive coverage
The terms “full coverage” auto and comprehensive insurance may seem similar, but they’re quite different. “Full coverage” car insurance is a term used to refer to a collection of liability and property damage coverages that together create broader coverage in the event of an accident. In contrast, comprehensive coverage is specific coverage for damage to your automobile unrelated to a collision with another car or fixed object that is typically included as part of “full coverage.”
How much does “full coverage” car insurance cost?
The cost of “full coverage” car insurance can vary by the type of car insured, whether it's a new car or an older one, demographics, where and how often the car is driven, discounts, and the driving record of the vehicle owners and drivers. Car insurance rates in California will be different from those in Texas. Cars driven a few times weekly will likely have different premiums than those driven long distances daily by a teen driver, and drivers who have had a car accident or have a less-than-perfect driving history can expect to pay more.
State insurance requirements can also impact auto insurance “full coverage” costs. Most states require a minimum amount of liability insurance, and many have other coverage requirements.
However, a recent U.S. News & World Report study states that the average cost of “full coverage” insurance is $2,068 annually.
How to save money on “full coverage” insurance
Choosing a “full coverage” auto insurance policy that best suits your family’s needs is crucial. Still, there are some ways you can save money on your auto insurance costs, regardless of coverage.
Comparing auto insurance company's rates by getting multiple car insurance quotes can be a great way to save money on your “full coverage” auto insurance premiums. When comparing rates, ensure that you compare similar coverage types and limits and that any optional coverages fit your family’s needs.
Many insurers offer car insurance discounts for multiple policies, other types of insurance (such as insuring your home or renter’s insurance and auto with the same insurance company), defensive driving courses, safe driving, good student discounts, anti-theft devices, and many more. These discounts can mean substantial savings on your auto insurance costs.
Consider your deductibles as a potential place to save money on your car insurance policy. Comprehensive and collision coverages have deductibles that must be met before coverage applies. Consider raising your deductibles where possible to reduce premiums.
Do I need full coverage on my car?
“Full coverage” auto insurance can help provide financial protection for your assets in the event of an at-fault claim and restore damage to your vehicle. It’s up to each individual to decide if “full coverage” auto insurance is right for them and whether optional coverages are a good fit. However, in some cases, you may not have a choice.
Most states require minimum liability limits for your auto insurance coverage and may require PIP and other coverages. In addition, if your vehicle is financed, the lender will likely require comprehensive and collision coverage and may even limit the deductible you can carry on those coverages.
There may come a time when your vehicle is paid for, its value has reduced dramatically, and you may consider not carrying “full coverage” auto insurance. Still, for most people, “full coverage” auto insurance provides the broadest protection and peace of mind against unknown risks.
How does “full coverage work?
Understanding the meaning of “full coverage” auto insurance can help ensure you have the protection you need. Because there is no standard “full coverage” insurance policy, you must review and understand the individual coverages provided as part of a “full coverage” auto insurance quote or policy. Ask for clarification on coverages you don’t understand to ensure you have the intended protection on your auto insurance policy.
FAQ: “Full coverage” car insurance
What is considered “full coverage” auto insurance?
“Full coverage” auto insurance is a general term used to refer to a combination of bodily injury liability, property damage liability, comprehensive coverage, and collision coverage. You can choose your liability coverage limits and your comprehensive and collision deductibles. In addition, you can include optional coverages to fully customize your “full coverage” auto policy.
Does full coverage cover at-fault accidents?
The comprehensive and collision coverage portion of your “full coverage” policy will cover damage from at-fault accidents, subject to your deductible. Medical coverage and other expenses for at-fault accidents will depend on whether you have chosen optional coverages that specifically address those expenses.
How do I know if I have full coverage car insurance?
The best way to know if you have “full coverage” auto insurance is to have a detailed discussion with your auto insurance agent and ask them to explain each coverage on your policy. You can also reference the declarations page of your auto insurance policy.
Article written by Shawnette Good.
Shawnette is an insurance professional with 30 years of industry experience helping consumers understand complex insurance topics. Outside of writing, Shawnette enjoys long nature walks and volunteering in her community.