Full Coverage Car Insurance
Full coverage car insurance covers damage to your own car in addition to damage you cause to others. It combines three types of coverage: liability insurance, collision insurance and comprehensive insurance. Together, these protect you financially whether you cause an accident, hit a deer or have your car stolen.
What is full coverage car insurance?
Full coverage is not an official insurance term. According to the Insurance Information Institute, the combination of liability, collision and comprehensive is what most people mean by “full coverage.”
Here’s a snapshot of the three main coverages that make up a full coverage policy.
| Coverage type | What it covers | Example |
|---|---|---|
| Liability | Others’ medical bills and property damage when you’re at fault. | You run a red light and hit another car. Liability pays for the other driver’s injuries and car repairs. |
| Collision | Damage to your own car from a crash with another vehicle or object. | You rear-end someone in traffic. Collision pays to fix your car after you pay your deductible. |
| Comprehensive | Damage to your car from non-crash events like theft, vandalism, weather and animal strikes. | A hailstorm dents your car or someone steals it. Comprehensive covers the cost of repairs or replacement. |
Key takeaway: Full coverage means liability plus collision and comprehensive coverage. It’s not an official product name but a common way to describe well-rounded car insurance protection.
Learn more: The 6 main types of car insurance
Do I need full coverage car insurance?
You need full coverage if you have a loan or lease on your car. Your lender requires it to protect their investment. Beyond that, full coverage is a smart choice for anyone who can’t afford to replace their car out of pocket after an accident, theft or weather event.
Here’s a quick guide to help you decide.
| Level | Your situation |
|---|---|
| ✅ You need it | You have a car loan or lease on your vehicle. |
| Your car is worth more than $5,000. | |
| You can’t afford to pay for a replacement car out of pocket. | |
| You live in an area prone to severe weather, theft or vandalism. | |
| 🟡 Consider it | Your car is paid off but still worth a few thousand dollars. |
| You have limited savings and no backup vehicle. | |
| You want added peace of mind even though it’s not required. | |
| ❌ Consider skipping it | Your car’s value is less than $5,000. |
| Your annual collision and comprehensive premium exceeds 10% of your car’s value. | |
| You have enough savings to replace your car if it’s totaled. |
A common rule of thumb: if your annual premium for collision and comprehensive costs more than 10% of your car’s current market value, dropping those coverages may make financial sense. For example, if your car is worth $3,000 and you’re paying $400 a year for collision and comprehensive alone, the math may not work in your favor.
Key takeaway: If you finance or lease your car, full coverage is required. If your car is paid off, compare its value to your annual premium to decide. If your car is worth less than $5,000, you likely can drop full coverage.
What does full coverage cost?
The average cost of full coverage car insurance in the U.S. is about $1,438 per year, according to data from the National Association of Insurance Commissioners.
Actual rates vary by driver and insurer. Your rate depends on factors like your age, location, driving record, credit score and the car you drive.
Here’s a general comparison of different coverage levels.
| Coverage | Typical monthly cost | Description |
|---|---|---|
| State minimum liability | $74 – $171 | Liability only. Covers others’ injuries and property damage, but does not cover your car. |
| Full coverage | $172 – $395 | Liability plus collision and comprehensive. Covers your car and others’ damages. |
Factors that affect your full coverage rate:
- Your age and driving experience. Younger drivers typically pay more because they have less time behind the wheel.
- Your driving record. Accidents and traffic violations raise your premium.
- Where you live. Urban areas with more traffic and higher theft rates tend to cost more.
- Your car’s make and model. Expensive cars and cars with high repair costs are pricier to insure.
- Your deductible. A higher deductible lowers your monthly premium but means you pay more out of pocket after a claim.
- Your credit score. In most states, insurers use credit-based insurance scores to help set rates.
Key takeaway: Full coverage costs roughly $150 to $300 per month for most drivers. Raising your deductible and comparing quotes are two of the easiest ways to lower your rate.
Learn more: Cheap full coverage car insurance
How to get full coverage car insurance
Getting full coverage doesn’t need to be complicated. You can compare quotes from multiple insurance companies to find coverage that fits your needs and budget.
Compare quotes from multiple insurers
Get quotes from several insurance companies and compare their prices, coverage limits and deductibles. Comparing multiple options can help you identify competitive rates.
Customize limits and deductibles
Choose coverage limits and deductibles based on your financial situation. A higher deductible can lower your premium, while higher coverage limits can provide more protection after a serious accident.
Avoid a lapse in coverage
When switching insurance companies, make sure your new policy begins before your old policy ends. Maintaining continuous coverage can help you avoid potential penalties or higher rates.
Review your coverage regularly
Your insurance needs can change over time. Review your policy when you buy a new car, pay off a loan, move to a new state or experience other major changes.
What full coverage doesn’t cover
Despite the name, full coverage does not cover everything. There are several common situations where you’d still be responsible for costs out of your own pocket.
| Not covered by full coverage | What to do about it |
|---|---|
| Gap between your car loan and its value. If your car is totaled and you owe more than it’s worth, full coverage only pays the car’s current value. | Add gap insurance to cover the difference between what you owe and what your car is worth. |
| Medical bills for you and your passengers. Full coverage focuses on vehicle damage, not personal injuries. | Add personal injury protection or medical payments coverage. PIP is required in 12 no-fault states. |
| Costs when an uninsured driver hits you. Over 15% of U.S. drivers are uninsured, according to the Insurance Research Council. | Add uninsured motorist coverage to protect yourself from drivers who have no insurance or too little. |
| Rental car costs while yours is being repaired. | Add rental reimbursement coverage. It typically costs a few dollars per month. |
| Roadside assistance. Towing, jump-starts and lockout help are not included. | Add roadside assistance coverage or get it through a membership program. |
| Mechanical breakdowns and normal wear and tear. | Consider a mechanical breakdown insurance policy or extended warranty for newer vehicles. |
Key takeaway: Full coverage protects your car, but not everything else. Consider gap insurance, uninsured motorist and rental reimbursement to fill the gaps.
Full coverage vs. liability-only insurance
Liability-only insurance pays for damage and injuries you cause to others. Full coverage adds collision and comprehensive, which pay for damage to your own car. The difference comes down to whether you want to protect your vehicle or only meet legal requirements.
| Factor | Full coverage | Liability only |
|---|---|---|
| Covers others’ damages | ✅ Yes | ✅ Yes |
| Covers your car | ✅ Yes | ❌ No |
| Required by law | Only if financing or leasing. | ✅ Required in 49 states. |
| Typical monthly cost | $168 – $392 | $74 – $169 |
| Best for | Newer cars, financed or leased cars and drivers who want maximum protection. | Older cars with low market value where the cost of coverage outweighs the potential payout. |
Learn more: The differences between liability insurance vs. full coverage.
Key takeaway: Full coverage protects both you and your car. Liability only covers damage you cause to others. The right choice depends on your car’s value and your finances.
When to drop full coverage on a paid-off car
Once your car is paid off, full coverage is no longer required. But that doesn’t mean you should drop it right away. The decision comes down to your car’s value and what you can afford to pay out of pocket.
Here’s a straightforward way to think about it:
- Check your car’s current market value. Look it up using Kelley Blue Book or your insurer’s estimate.
- Add up your annual collision and comprehensive premiums.
- Apply the 10% rule. If your annual premium for those two coverages exceeds 10% of your car’s value, switching to liability only may make more sense financially.
For example, if your car is worth $4,000 and you’re paying $500 a year for collision and comprehensive coverage, that’s 12.5% of your car’s value. In that case, you might save money by dropping full coverage and setting aside the premium difference in an emergency fund.
However, if your car is worth $15,000 and your premium is $600 a year, that’s only 4% of your car’s value. Keeping full coverage may provide more financial protection because the potential payout is significantly higher than the annual cost of coverage.
Not sure how much car insurance you need? Comparing different coverage levels and quotes can help you find the right balance.
Key takeaway: Use the 10% rule: if your annual collision and comprehensive premium exceeds 10% of your car’s value, consider switching to liability only.
Frequently asked questions
Is full coverage car insurance required?
Full coverage is generally required by lenders when you finance or lease a vehicle. If you own your car outright, your state typically only requires the minimum liability coverage mandated by law.
How much does full coverage car insurance cost?
The cost varies based on factors such as your location, age, driving history, vehicle, coverage limits, deductible and, where permitted, credit-based insurance factors.
What’s the difference between full coverage and liability insurance?
Liability insurance generally covers injuries and property damage you cause to other people. Full coverage typically adds collision and comprehensive coverage for your own vehicle.
Does full coverage pay for mechanical breakdowns?
No. Standard full coverage generally does not pay for mechanical breakdowns, normal wear and tear or routine maintenance.
When should I drop full coverage on my car?
Consider your vehicle’s current value, the cost of collision and comprehensive coverage and whether you could afford to replace the vehicle yourself after a total loss.
Does full coverage include roadside assistance?
Not automatically. Roadside assistance is generally an optional coverage that can be added to a policy.
Is full coverage required for a leased car?
In most cases, leasing companies require comprehensive and collision coverage in addition to liability insurance.
Does my credit score affect my full coverage rate?
In many states, insurers may use credit-based insurance information when calculating premiums. However, rules vary by state.
Methodology
Statistics, rates and conclusions in this article are based on available car insurance rate data and industry information. Actual insurance costs vary significantly depending on the driver, vehicle, location, insurer, coverage limits and other rating factors.
Unless otherwise indicated, quoted rates and examples should be considered illustrative rather than guaranteed prices. Insurance companies use their own underwriting criteria when calculating premiums.
Editorial integrity
Our goal is to provide balanced, useful information about car insurance. Insurance rates, coverage requirements and regulations can vary by state and may change over time. Always review your policy documents and check your state’s insurance requirements before making coverage decisions.
