“Full coverage” is a commonly used term among auto insurance buyers. It usually refers to a combination of liability, collision, and comprehensive insurance, along with any other coverage that a vehicle owner may want. The combination of policies and coverage that your insurance carrier offers will vary by state, and it’s up to you to determine what level of coverage you need.
To some degree, “full coverage” is the level at which you feel comfortable accepting any financial burden for damage to your car. Learn more about the various coverage options and decide what you need to be fully covered.
What Is Full Coverage Auto Insurance?
There is no car insurance policy called “full coverage” that will cover every conceivable situation that happens to or with your car.1 Be wary of any insurance agent who claims otherwise.
Generally, full coverage is a combination of different kinds of auto insurance coverage as required by your state or circumstances. This usually includes, at a minimum:
- Liability coverage: This covers your liability to the other driver or their passengers for bodily injury and property damage. It’s required in nearly every state.2
- Collision coverage: Physical damage that occurs to your car during a crash is covered by collision.
- Comprehensive coverage: Things that happen to your car outside of a collision fall under comprehensive coverage.
Every state in the U.S. can set its state minimum requirements for auto insurance. These typically include bodily injury liability and property damage liability. Some states also require insurance for uninsured or underinsured motorists, and some require medical payments coverage. When financing a car, your lender may require only that you meet your state’s minimum requirements, or it may require collision and comprehensive as well.
You can find your state’s minimum auto insurance requirements through the state insurance commissioner’s website.
How Does Full Coverage Auto Insurance Work?
Your coverage depends on which policy you choose. Beyond liability coverage, your carrier may offer several options.
Medical Payments and Personal Injury Protection
Medical Payments and Personal Injury Protection are provided at the level set by the states that require it. These coverages help pay the medical costs of you or others who are in the vehicle with you. It may also cover lost wages and other personal expenses related to injuries from the accident.
Uninsured or Underinsured Motorist Coverage
Some states require coverage to protect you in the event you collide with an uninsured or underinsured driver, or if the other driver flees the scene. If that happens, their insurance, if any, may not be enough to pay for medical expenses. Check with your state to see what it requires.
Collision Insurance
Collision coverage covers damage to your car if you are at fault in an accident, whether your car strikes another vehicle or an object such as a guardrail. It doesn’t cover damage to the other person’s car.3
This coverage isn’t infinite. You will choose your coverage limits and the amount you must pay with your deductible, and these amounts will affect your premium. If you bought your car with a loan, your lienholder may require this coverage; otherwise, it’s usually optional.4
Comprehensive Insurance
Comprehensive coverage covers damage to your car that wasn’t caused by a crash, such as fire, theft, vandalism, storm damage, animal damage, or falling objects. Paired with collision coverage, comprehensive insurance helps pay for damage to your car that is outside of your control.1 5
Other Optional Coverage
You might think that with full coverage insurance, towing and car rentals are included—but they might not be. Discuss all of your options with your agent so you aren’t caught by surprise. Here are a few of the options that you might be able to add to your policy at a relatively minimal cost.
Gap Insurance
Gap insurance is also known as loan or lease payoff insurance, and it is a coverage you should request upfront if you are taking out a loan for a significant portion of your vehicle’s value. If you owe more on your loan than your car is worth and have an accident, you will be responsible for that “gap” unless you have this coverage. Considering how quickly vehicle value depreciates, this is well worth your consideration.6
Towing and Roadside Assistance
Roadside assistance is commonly packaged with full coverage auto insurance. This coverage usually includes towing along with services such as changing a flat tire or jumping a dead battery.7
Car Rental Coverage
Some insurance carriers offer a limited amount of car rental reimbursement when you purchase full coverage auto insurance. Sometimes the coverage is not listed, so you have to ask what your policy offers.
You can usually choose a certain amount of rental coverage per day, so be sure you choose enough to cover a vehicle that would be sufficient for your needs.4
OEM Endorsement
Insurance companies do not always use parts straight from the car manufacturer, also called the original equipment manufacturer (OEM). Instead, they may require cheaper aftermarket parts and used parts for repairs.8 However, if you request it, some insurance carriers will offer an endorsement that allows you to get OEM parts.
Full Glass Coverage
Glass damage is automatically covered when you choose full coverage insurance because it would fall under comprehensive coverage. However, if you opt for a high deductible on comprehensive, it could wipe out your glass coverage. With full glass coverage, you pay a higher premium to get no deductible or at least a lower deductible for glass claims only.9
Vanishing Deductible
If the insurance carrier you select offers a vanishing deductible, which rewards you with a discount off your deductible for every year of safe driving, be aware the coverage usually does not automatically come with a full coverage policy. It is typically offered for an additional cost and you must add it to your policy before a loss occurs.10
Do I Need Full Coverage?
Although some auto insurance policies are required by law or by lenders, many of them come down to personal preference. If you don’t have much money saved up, it may be smart to protect yourself from a major liability in the event of an accident. In that case, you should purchase coverage that covers most situations and grants you a low deductible. Keep in mind, though, you’ll pay for that coverage in high premiums.
If you have plenty of money in savings and could absorb much of the cost of an accident, you might elect to choose less coverage or higher deductibles. Be careful, though: Medical expenses from an accident can be far more expensive than a new vehicle. Your agent can help you think through the risks involved and help you decide what full coverage auto insurance looks like for you.