What is full coverage auto insurance?

Young, smiling couple in car talking about full coverage auto insuranceImage: Young, smiling couple in car talking about full coverage auto insurance

In a Nutshell

Full coverage auto insurance isn’t a specific type of insurance. It’s just a way of describing insurance policies that give you a combination of coverage for medical bills and property damage suffered in a car accident. So you won’t find “full coverage auto insurance” on a list of options offered by insurance companies — and it’s important to know that auto insurers define full coverage in different ways.

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If you ask insurance companies for quotes for full coverage auto insurance, you may get varying options.

Full coverage auto insurance isn’t actually a type of insurance. Insurers define full coverage in different ways — although they generally agree that it should protect you financially from bodily injury and car damage.

Because policies vary by provider, it’s important to carefully read each insurance quote to understand the coverage included. Let’s take a look at the protection typically included in what some insurance companies consider “full coverage auto insurance” as well as average costs.



What is included in full coverage auto insurance?

Full coverage auto insurance typically means a combination of coverage that includes …

  • Liability insurance This coverage, made up of bodily injury liability insurance and property damage liability insurance, can help pay for the other driver’s injuries or vehicle damage if you cause an accident. Liability insurance is required in every state except New Hampshire. Research your state’s insurance requirements to find out the minimum amount of liability coverage you’re required to carry, as well as if you’re also required to buy uninsured motorist and underinsured motorist coverage as part of your liability coverage.
  • Collision coverage This helps cover the cost of damage to your car in a collision, whether it’s with another car or an object like a tree or guardrail. This coverage is generally optional, but if you lease or finance a car your lender may require you to buy it.
  • Comprehensive coverage This helps cover vehicle repairs or replacement for non-collision losses, including fire as well as damage related to weather, animals, vandalism or falling objects. Similar to collision insurance, comprehensive coverage may be required if you lease or finance your car, but generally optional otherwise.

Depending on your state requirements, you might also need to purchase medical payments coverage or personal injury protection, aka PIP, coverage.

Some insurance companies consider full coverage car insurance to include all coverage options, which may include roadside assistance, towing coverage and rental car reimbursement.

What does full coverage insurance cost?

The average combined premium paid for liability, comprehensive and collision insurance in the U.S. in 2017 was $1,133.92 per vehicle, according to the National Association of Insurance Commissioners Auto Insurance Database Report published in 2020.

Depending on the types of coverage you bundle together for your full coverage car insurance, the cost of your coverage will vary. Additional factors like your age, location, vehicle and credit history can also play a role in how much your auto insurance will cost. 

What is good auto insurance coverage?

What’s considered “good” coverage is unique to your needs and financial situation. But the National Association of Insurance Commissioners suggests that the car insurance policy you choose should …

  • Meet at least the minimum coverage requirements set by your state.
  • Meet the requirements of your auto loan or lease, if you don’t own your car outright. This may include comprehensive and collision insurance.
  • Provide enough coverage to pay for your or the other driver’s property damage and medical care.
  • Cover all driving members of your household.

So, how much car insurance coverage is enough? Beyond the minimum insurance required by your state and lender, you may also consider buying additional coverage to better protect your finances. Consider this: How much could you afford to pay out of pocket for your medical bills or car damage? Springing for higher coverage limits upfront could end up saving you money in the long run.

Similarly, it may be tempting to bring your insurance costs down by choosing a high deductible for your comprehensive or collision coverage. Just be sure the deductible is an amount you could reasonably afford to pay if your car is damaged. For example, could you afford to pay a $1,000 deductible out of pocket before your insurance kicks in?


What’s next?

Your “full coverage auto insurance” may look different from someone else’s depending on your needs, finances and where you live.

But be sure that the policy you choose meets the requirements of your state and auto lender, covers all of the drivers in your household (who don’t have their own auto insurance policies), and can protect you financially from medical expenses and property damage costs for you and the other driver.

Compare quotes from several auto insurance companies to help find the best coverage and rates for you. Even if you’re already covered, it may be time to shop around to make sure you’re getting the best auto insurance rates for your coverage needs.


About the author: Sarah Sidlow is a freelance writer and editor based near Detroit. She has a master’s degree in journalism from Georgetown University. Sarah’s work has appeared in Luxembourg’s national n… Read more.