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Full-coverage car insurance is generally a combination of policies and typically includes collision, comprehensive, personal liability, and medical payments insurance. For most drivers, full-coverage car insurance is optional.

Despite the term “full coverage,” a full-coverage car insurance policy doesn’t provide unlimited protection. However, full-coverage policies provide significantly more protection than liability-only policies.

What is considered full-coverage car insurance?

A full-coverage car insurance policy refers to a collection of coverages that protect you from the legal and financial liabilities of an accident, as well as physical damages to your vehicle.

Here are the coverage types that are usually included in full-coverage auto insurance.

Liability coverage

Liability insurance includes two parts — bodily injury liability coverage and property damage liability coverage.[1] It only applies when you cause an accident and the other driver suffers losses.

In the case of an at-fault accident, the bodily injury liability portion of your policy compensates the other driver for any medical expenses. The property damage liability portion pays for their car repairs. Liability insurance also covers your legal fees if another driver sues you.

In most states, personal liability insurance is a legal requirement. The minimum coverage limits for liability insurance are different in every state, but there’s no guarantee that a minimum-coverage policy will cover the full cost of the damages after an accident.

Collision coverage

Collision insurance pays for your vehicle’s repairs after an accident you’re responsible for. It also covers single-car crashes and rollovers. Collision insurance is not legally required, but lenders typically require it if you lease or finance your car.

With most policies, the coverage limit of a collision insurance policy is the actual cash value (ACV) of your vehicle, which is the original cost of your vehicle minus depreciation. 

Important Information:

Depreciation accounts for normal wear and tear, mileage, age, and more.

Comprehensive coverage

Comprehensive coverage pays for your vehicle’s repairs when the car is damaged in a non-collision event.[1] It’s an optional policy, but it’s often required for drivers who lease or have an auto loan.

Comprehensive insurance covers a variety of potential losses, including:

Like collision insurance, the policy limit for comprehensive insurance is usually the ACV of your vehicle. If you file a claim, you’ll generally pay a deductible before your insurer covers the damages, up to the policy limit.[2]

Medical payments coverage

Medical payments (MedPay) is an optional car insurance policy typically included with full-coverage car insurance. It provides coverage for your and your passengers’ medical bills if you’re injured in a covered accident, no matter who was at fault.

You can use your coverage to pay for doctor’s visits, emergency room care, stitches, X-rays, rehabilitation, and accident-related medical costs. In the event of a fatal car accident, most MedPay policies also cover funeral costs.

When you purchase a full-coverage insurance policy, you get to choose your own MedPay coverage limits. To figure out how much coverage you need, consider your health insurance coverage.

In general, if you have a robust health insurance policy with great benefits and a low deductible, you might not need much MedPay coverage. If you could comfortably afford to pay for your medical bills out of pocket, MedPay might be less important for you.

However, if you don’t have health insurance, or if your health insurance policy has high out-of-pocket costs, it might be worth choosing a higher policy limit for MedPay coverage. Every car insurance company offers different policy limits for MedPay. You can usually see the options when you apply for a quote.

Optional add-ons

Most car insurance companies sell optional policies, also called endorsements, which fill gaps in the standard policy and provide more customized coverage. Every car insurance provider offers different endorsements, but some of the most common policies include the following:

  • Roadside assistance covers the cost of basic roadside car repairs. Most policies will cover flat tire changes, dead batteries, extrication, fuel delivery, and towing (up to a certain mileage).

  • Accident forgiveness waives your first minor at-fault accident and prevents your premium from increasing after a crash. Sometimes, this policy is only available to drivers with a clean driving record or no claims history.

  • Gap insurance can be valuable if you lease or finance your vehicle. If your car is totaled, gap insurance covers the difference between what you owe on the car loan and its diminished value.

  • Uninsured/underinsured motorist insurance (UM/UIM) applies when you get into an accident with an uninsured driver or a driver who doesn’t have enough coverage to pay for your losses in full. In some states, this is a required policy.[3]

  • Personal injury protection (PIP) is required in most no-fault states. This policy pays for your medical expenses and lost wages after an accident, regardless of which driver was responsible. In states that don’t require PIP, you can sometimes purchase it as an endorsement.

Check Out: The 10 Best Car Insurance Companies

Liability-only vs. full-coverage car insurance

As you might assume, liability-only insurance only provides personal liability coverage. It’s often called a minimum-coverage policy because it only contains the coverage legally required in your state. Liability-only insurance does not cover any damage to your vehicle.

In the table below, you can see the major differences between the most common types of auto insurance.

Coverage TypeWhat It CoversIs It Required?Who It’s Good For
Bodily injury liabilityAfter an at-fault accident, this policy pays for the other driver’s medical expenses if they get injured.Yes, in most statesAll drivers
Property damage liabilityAfter an at-fault accident, this policy pays for the other driver’s vehicle repairs.Yes, in most statesAll drivers
Uninsured/underinsured motoristThis policy provides extra coverage for your losses if you get into an accident with an uninsured motorist or a driver with limited insurance coverage.Yes, in some statesAll drivers
Medical paymentsPays for your and your passengers’ medical bills after a collision, no matter which driver was at fault.Yes, in some statesDrivers without health insurance or with limited health insurance coverage and drivers who can’t afford their medical expenses after an accident
CollisionPays to repair or replace your vehicle after a covered accident, up to your car’s ACV.NoDrivers who lease or finance their vehicle, and drivers with a newer vehicle
ComprehensivePays to repair or replace your vehicle after a covered non-collision claim, up to your car’s ACV.NoDrivers who lease or finance their vehicle, and drivers with a newer vehicle

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How much is full-coverage car insurance?

The national average rate for full-coverage car insurance is $295 per month, according to Insurify data. However, the cost can vary significantly based on factors like your location, driving record, vehicle type, and credit score.[4] Your full-coverage car insurance premium will also depend on what discounts you qualify for.

Cost of liability-only vs. full-coverage insurance

In general, full-coverage car insurance is more expensive than liability-only coverage. The national average rate for liability-only coverage is $198 per month, based on Insurify data. However, several factors can affect the cost of a liability-only policy, like your state’s minimum car insurance requirements, your driving record, and your age.[4]

What you need to know about full-coverage car insurance deductibles

Full-coverage car insurance policies generally have a deductible, which is the amount of money you have to pay when you file a claim.[2] Specifically, the deductible applies to collision and comprehensive insurance claims. Liability insurance does not have a deductible.

When you file a claim under your collision or comprehensive insurance, the insurer covers the cost of repairs, minus your deductible.[2] For example, if your car repairs after an accident cost $3,000 and you have a $1,000 deductible, insurance will cover $2,000.

You get to choose your deductible when you purchase a full-coverage insurance policy. Common deductibles range from $250 to $2,000. In general, the higher the deductible you choose, the lower your car insurance premium will be.[2]

See Also: High-Deductible Car Insurance

Who needs full-coverage car insurance?

Although full-coverage insurance isn’t legally required, it’s a good investment for many drivers.

If you lease or finance your vehicle, the lienholder — like an auto loan company — might require full-coverage car insurance. This protects your lender from financial loss if something happens to your vehicle while you still owe money on it.

Keep in Mind:

Full-coverage auto insurance can also be beneficial if you drive a high-value car. Newer cars and luxury models are often expensive to fix, and without physical damage coverage, you would have to pay for the repairs (or a new car) out of pocket in the event of a claim.[5]

How to buy full-coverage car insurance

Now that you understand full-coverage insurance, you can learn how to purchase a policy. Before you buy a full-coverage insurance policy, however, it’s important to compare a few different insurance companies. Here are the general steps you should follow to buy full-coverage car insurance:[6]

  1. Research insurance companies. Every car insurance company offers something different, whether it’s more discounts, better coverage options, or lower rates. Research and compare companies to see which ones meet your needs.

  2. Choose your coverage limits. Think about how much coverage you want for policies like liability insurance and MedPay. You also need to decide what deductible you can comfortably afford.

  3. Consider endorsements. Decide if you want to add endorsements to your policy, like accident forgiveness or gap insurance. Make sure you choose an insurance company that offers the policies you want.

  4. Compare quotes. Next, you can start getting quotes on individual insurer websites or using a quote-comparison platform. With a quote-comparison platform, you can get matched with quotes from many different insurance companies based on a single application.

  5. Purchase a policy. After you’ve compared quotes and found the best match for you, it’s time to purchase your policy. Once the initial premium is paid, your coverage will take effect. Don’t forget to download or print your insurance ID cards, which you’ll need to keep in your vehicle.

Read More: Cheap Car Insurance

Full-coverage car insurance FAQs

Here are some of the most frequently asked questions about full-coverage car insurance.

  • You may consider dropping collision or comprehensive insurance for an older car if it’s worth less than 10 times your premium.[7] If you still have a loan on the car, the lender may require these coverages, so check with the lender to ensure you still have the required coverage.

  • If you lease a car, comprehensive and collision insurance are usually required to protect the car owner’s investment — in this case, the bank, dealership, or leasing company that owns the car.[8]

  • While comprehensive and collision coverages are separate add-ons to car insurance policies, some insurers may bundle the two coverage options under one endorsement. If you want to buy one without the other, compare car insurance companies that offer them separately.

  • Sometimes it is. In no-fault states where personal injury protection isn’t required, it’s a coverage that drivers can add to their insurance policies to increase their protection in the case of an accident.

  • Sometimes it is. In states where UI/UM coverage isn’t required, drivers can add it to their policy to help protect themselves if they’re in an accident with a driver who is uninsured or doesn’t have high enough limits to cover expenses.

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Sources

  1. III. "Auto insurance basics—understanding your coverage." Accessed January 17, 2023
  2. III. "Understanding your insurance deductibles." Accessed January 17, 2023
  3. III. "Protect yourself against uninsured motorists." Accessed January 17, 2023
  4. III. "What determines the price of an auto insurance policy?." Accessed January 13, 2023
  5. NAIC. "A Consumer's Guide to Auto Insurance." Accessed January 17, 2023
  6. III. "How to find the right auto insurance." Accessed January 17, 2023
  7. III. "Nine ways to lower your auto insurance costs." Accessed January 18, 2023
  8. III. "Insuring a leased car." Accessed January 18, 2023
Elizabeth Rivelli
Elizabeth Rivelli

Elizabeth Rivelli is a freelance writer covering insurance and personal finance. She has extensive knowledge of various insurance lines, including property and casualty, health, and life insurance. Her byline has been featured in dozens of publications, including Investopedia, Forbes, Bankrate, NextAdvisor, and Insurance.com