What is full coverage car insurance?

Full coverage car insurance refers to an auto insurance policy that includes the state-required minimum coverage and collision and comprehensive coverage. While full coverage car insurance is not a formal type of insurance, drivers and auto insurers use this term to refer to a policy that offers significantly more financial protection than basic liability insurance coverage.

What’s included in full coverage car insurance?

The definition of full coverage car insurance can vary by state and insurer since it’s not an official insurance type. However, a full coverage auto policy usually consists of liability insurance, plus collision and comprehensive coverage. It also includes any other state-specific coverages required by law.

Liability car insurance

Liability car insurance is the most basic type of car insurance. Nearly every state requires that drivers carry some form of this coverage.

Notably, liability car insurance only covers property damage and bodily injuries other people experience when you are at fault for an accident. It does not cover repairs to your own vehicle or medical costs for you or members of your household who are passengers in your vehicle.

Each state sets its own minimum liability requirements. The most common minimum limits are $25,000/$50,000/$25,000 (often written as 25/50/25), meaning:

• A minimum of $25,000 in bodily injury coverage per injured person

• A minimum of $50,000 in bodily injury coverage per accident for all injured people

• A minimum of $25,000 in property damage coverage per accident

If you are at fault in a collision involving an expensive vehicle or multiple vehicles or you severely injure several people — resulting in expensive ambulance rides, surgeries, and medications, plus lost wages and legal costs — it’s very possible that your state’s minimum liability coverage won’t be enough. 

Further, states like Florida do not require bodily injury liability at all, leaving drivers particularly vulnerable in the event of an accident that causes serious injuries. For this reason, many drivers opt to purchase additional coverage types and increase their liability limits beyond what’s required by their state.

Collision and comprehensive coverage

Together with liability coverage, collision and comprehensive insurance create what’s commonly referred to as a full coverage policy. Collision and comprehensive insurance protect against all sorts of damage — even if you cause the accident — including damage from:

• Collisions with other vehicles

• Collisions with property, such as trees, guardrails, fences, and telephone poles

• Collisions with animals

• Hit-and-runs

• Natural disasters and fires

• Falling objects

• Vandalism and theft

Unlike liability coverage, collision and comprehensive insurance come with a deductible. This is the amount you agree to pay out of pocket in the event of a covered claim. Insurance will kick in to pay the remaining damages, up to your policy limits. Common deductible amounts are $500 or $1,000, but other options may be available. The higher your agreed-upon deductible, the cheaper your policy premium will be. 

While state governments do not require collision and comprehensive coverage, you may still need to carry these if you are financing or leasing a vehicle.  The lender or leasing company may even have deductible requirements for these coverages.

For many drivers, collision and comprehensive insurance are a worthwhile investment, even if it’s not mandatory. They protect against having to pay for potentially expensive vehicle repairs yourself.

Most drivers should only consider dropping collision and comprehensive coverage when the annual cost of your insurance plus your deductible is greater than the car’s worth. In other words, keeping full coverage might not be necessary if the vehicle’s value has depreciated significantly and you wouldn't get much for it if you sold it.

Additional coverage required by your state

A full coverage auto insurance policy also includes all state-required coverages beyond liability; these vary by state. Depending on where you live, this could include:

• Uninsured/underinsured motorist coverage: This insurance covers you in case another driver causes an accident but does not have liability insurance — or does not have enough liability insurance — to cover your vehicle damage and expenses related to your injuries.

• Medical coverage: This might include medical payments (also called MedPay) or personal injury protection (PIP), which helps cover medical expenses for you and your passengers, up to the stated policy limit. MedPay is traditionally limited to true medical costs while PIP may extend to lost wages, rehab, physical therapy, and help with essential tasks around the house while you recover (such as laundry, meal preparation, or child care).

States don’t require coverage such as rental car reimbursement or emergency roadside assistance, but these can be valuable add-ons to a full coverage car insurance policy.

Full coverage vs. minimum coverage car insurance

A full coverage car insurance policy includes all state-required minimum coverages but adds on additional coverage that helps cover damage to your own vehicle. Many drivers with full coverage auto insurance also increase the limits of the required coverage types, such as higher limits for bodily injury and property damage liability.

Minimum coverage car insurance, on the other hand, only complies with your state’s requirements. That means carrying the bare minimum liability coverage. If your state requires medical coverages or uninsured/underinsured coverage, these would be included as well.

Even if your state doesn’t require medical and uninsured/underinsured coverage, they can be a valuable component of a full coverage auto insurance plan. However, not all states offer these coverage types. Speaking with a licensed car insurance agent can help determine which types and amounts of coverage are best for you.

Who needs full coverage car insurance?

Most drivers could benefit from full coverage car insurance. Because it is not required by law, drivers who own their vehicles outright don’t need these coverage types, but experts recommend carrying them if you can afford to.

Any driver who is financing or leasing a vehicle typically must carry collision and comprehensive coverage as a term of their loan or lease. 

Here are a few other scenarios where full coverage makes sense to have:

• New or expensive vehicles: If you drive a new car, a luxury vehicle, or a high-value used car, full coverage is almost always worthwhile. Without comprehensive and collision coverage, you would be solely responsible for the cost of repairing or replacing your vehicle following a collision or damage from events like theft, fire, or severe weather. 

• Drivers who cannot afford replacement: Even if your car is not brand new, if your personal finances would be significantly strained by having to purchase a replacement vehicle immediately after a total loss accident, full coverage can provide a safety net.

• Areas with high risk: If you live in an area prone to severe weather (hail, floods, or hurricanes), high rates of vehicle theft, or high traffic density, carrying comprehensive and collision coverage could be a wise investment.