What is considered full coverage auto insurance

Full coverage car insurance is a term that refers to a combination of coverage types that can protect your car in most situations. Even though you’ve probably heard of full coverage insurance, there’s no such thing as a “full coverage policy.”

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But this extra protection comes at a cost. Since it covers more situations, full coverage insurance is pricier than liability coverage alone, which only pays for injuries and damage you cause to others. To find cheap full coverage insurance, it’s important to shop around for the best rates.

What does full coverage car insurance cover?

Full coverage insurance provides coverage for most scenarios, including damage to your car from the weather, an at-fault accident, hitting an animal or vandalism. It will even pay out the current value of your car if your vehicle is stolen.

Full coverage auto insurance may include:

But full coverage auto insurance doesn’t cover everything. If you want extras like new-car replacement insurance, emergency roadside assistance or custom parts and equipment coverage, you may need to add them separately.

How much is full coverage car insurance?

The national average cost of full coverage auto insurance in 2021 is $1,592 per year or about $133 a month for a 40-year-old good driver with good credit, according to NerdWallet’s analysis of average car insurance rates.

Although it’s one of the largest insurers in the country, Liberty Mutual is not included in our analysis because it does not provide rate data.

Full coverage insurance vs. minimum rates by company

NerdWallet compared 2021 rates for minimum and full coverage auto policies across the country. Among the largest companies, we found that full coverage insurance costs more than twice as much as minimum coverage, on average.

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Who needs full coverage auto insurance

Buying full coverage auto insurance may be a sound investment if:

• You have a new or expensive car.

• You have an auto loan or lease.

• You regularly commute in heavy traffic.

• You live in a place with extreme weather, high car theft rates or a high risk of animal collisions.

• You can’t afford to repair or replace your car if it’s wrecked or stolen.

Full coverage car insurance isn’t required by law. Many states mandate only a small amount of auto liability insurance. But that won’t cover your injuries or car repairs — only damage or injuries you cause others.

🤓Nerdy Tip

If you have an auto loan or lease, your lender likely requires you to buy collision and comprehensive coverage. The vast majority of companies offer these policies, but some insurers don’t let you purchase one without the other.

For an older vehicle, however, full coverage may not be worth the cost. Comprehensive and collision insurance reimburse you only up to the value of your car at the time it’s damaged or stolen. And they usually have an insurance deductible, an amount you’re expected to pay out of pocket toward repair or replacement. That's why you should always make sure you can afford to pay the deductible before you make a claim.

For example, let's say you have a car worth $1,500. You have comprehensive and collision insurance, which costs $600 per year, with a $1,000 deductible.

If you get into a car accident and total your car, you'll get a $500 check (your car's value minus your deductible) at most from your insurer. In this case, you're left with $500, which is $100 less than what you paid for the coverage. Note: Although full coverage doesn't make sense here, you'll still need to buy minimum coverage to legally drive.

Not sure if you need full coverage insurance? Checking your car’s current value can help you decide whether full coverage makes sense.

Even with full coverage, there are other policy options you might need. For example, roadside assistance, gap insurance and medical payments insurance all pay for expenses full coverage car insurance won’t. If you’re on the fence, play with the coverage options you see online when shopping for car insurance quotes.

Full coverage auto insurance rates in each state

Prices vary even more by state. Compare annual average rates below for minimum and full coverage car insurance in each state.

These benchmark rates can help you know what to expect, but to get the best rates possible, you’ll want to compare car insurance quotes.

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How to save on full coverage car insurance

Shop around. To find cheap full coverage insurance, it’s important to shop around. Compare rates with at least three companies to find the cheapest rate for you.

Look for discounts. There are car insurance discounts for everything from getting good grades to owning a new car. Call your agent to confirm what’s offered to maximize your savings.

Consider increasing your deductible. One way to lower your car insurance bill is by raising the deductible, or what you pay before insurance kicks in. Doing this will lower the overall cost of your policy, although savings vary by company.

Avoid traffic infractions. Speeding tickets, accidents and DUIs can increase your car insurance rates drastically, even after one incident. These infractions can stay on your record for three to five years, so make sure to drive cautiously if you want the cheapest rates.

Work on your credit. Your credit history can have a big impact on your auto insurance bill. In fact, our rates analysis found having poor credit can increase your rates as much as a DUI for some drivers.

Frequently asked questions

What isn’t included in full coverage?

Despite the name, full coverage insurance doesn’t include everything. Depending on your state minimums, coverage that might not be considered full coverage include:

• Gap insurance.

• New car replacement.

• Roadside assistance.

• Medical payments coverage.

• Personal injury protection.

Is full coverage car insurance worth it?

Policies with full coverage pay out if your car is damaged, while minimum insurance typically only covers damage to another car or person. If you don’t want to be stuck paying for damage to your car, or wouldn’t be able to afford it, you may want to pay for extra coverage. In particular, drivers who live in areas with extreme weather conditions, own an expensive vehicle or have a high-traffic commute might benefit from full coverage insurance. Shop around for car insurance quotes to find the best full coverage insurance for you.

What does full coverage insurance cover?

Full coverage isn’t a specific policy, but generally includes several types of coverage including liability insurance, comprehensive and collision coverage and any other coverage needed to meet the state’s minimum insurance requirements.

When can you drop full coverage insurance?

If you have an older car, and it isn’t worth much more than your deductible, consider dropping comprehensive and collision coverage. But remember, if you have a car loan or lease, your contract may require you to have full coverage insurance.

Is collision the same as full coverage?

What is the meaning of full coverage?