Full coverage car insurance costs more than a policy with only your state's minimum car insurance requirements. However, that added coverage can play a vital role if you get into a car crash.
That’s because full coverage insurance helps pay car repair bills if you get into an accident and medical bills if you cause an accident that injures others. A good car insurance policy can help set your mind at ease.
What Is Full Coverage Car Insurance?
The term “full coverage car insurance” does not refer to a special policy type, but rather it refers to a policy that consists of liability, collision and comprehensive insurance. These three coverage types make for a solid foundation for a car insurance policy.
Some states also require additional coverage types, such as personal injury protection and uninsured motorist coverage.
There are other coverage types you might want for the best car insurance, such as rental reimbursement coverage in case your vehicle is in the shop after an accident.
What Does Full Coverage Car Insurance Consist Of?
Full coverage car insurance typically consists of three separate components: Liability insurance, collision insurance and comprehensive insurance. Here’s a breakdown of how each coverage type works.
All states except New Hampshire require car owners to purchase a minimum amount of liability car insurance. These minimum state requirements outline two types of liability insurance:
Bodily injury liability insurance covers the medical expenses of another party if you're at fault.
Property damage liability insurance covers damage done to another person's property that you crashed into. This could include someone else’s car, mailbox, fence, garden gnome collection or building.
Here’s an example of how liability car insurance works.
If you cause a car accident that results in physical damage to the other driver's car and injury, the other driver can make a claim against your liability insurance for car repair bills and medical expenses. Your liability insurance would also pay for your legal defense, settlements and judgments if the other driver sues you.
But if you don't carry enough liability car insurance, you could be on the hook for any amount that's above your policy limit. That’s why it’s important to purchase more than your state’s minimum car insurance requirements. For example, if you cause a car crash with multiple injuries, the medical bills could quickly exceed the minimum liability requirements.
Consider at least liability limits with $100,000 in bodily injury liability per person and $300,000 per accident, and at least $100,000 for property damage liability. This is typically written as 100/300/100 in car insurance policies.
Drivers with high incomes and/or significant assets should consider higher amounts in case someone decides to sue, plus umbrella insurance.
Does liability insurance cover my car if someone else hits me?
Your own liability insurance only pays others for damage you cause. It will not pay anything for your own car or your injuries.
If someone else causes an accident, their liability insurance should cover your car damage and injuries. But the other person's insurance will only pay up the limits they bought. If the accident was expensive, their insurance may not be enough to cover all your bills.
In addition, many drivers hit the road without any auto insurance. If they crash into you, they have no insurance to pay for the damage they cause. You can sue another driver who causes a crash, but not all drivers have assets to use to pay for a lawsuit lawsuit.
Collision and comprehensive coverage
Collision and comprehensive coverage are important for covering damage to your own car. Your liability insurance won't pay for any of your vehicle damage. If you own your vehicle outright then this coverage is optional. Expect to have to buy them if you have a car loan or lease.
Collison covers pay for damages to your car from crashes with any object, such as a pole or guardrail. Comprehensive coverage pays for car theft and repairs due to weather, animal damage, vandalism, fire, flood and falling objects
For example, let's say your car tires skid on ice and you crash into your neighbor's fence. Collision coverage would pay for the repairs to your vehicle. Liability insurance would pay for the neighbor's fence.
If you drove across a flooded street comprehensively without realizing how deep it was, coverage could pay for car flood damage.
Collision and comprehensive coverage both have a deductible, such as $500 or $1,000. That's the amount of money from an insurance check if you make a claim.
How Much Does Full Coverage Car Insurance Cost?
Nationally, the average full coverage car insurance policy costs about $1,190 per year, according to the National Association of Insurance Commissioners.
The liability portion of an auto insurance policy is generally the most expensive component.
What Other Coverages Can Be Included in a Car Insurance Policy?
Building the best auto insurance policy usually requires adding a few more options to full coverage car insurance: Uninsured motorist coverage and personal injury protection. These types cover injuries to you and your passengers in different ways. They are required in some states.
Uninsured motorist coverage
Uninsured motorist coverage helps safeguard you against folks who are on the road with no auto insurance. Typically, if you're injured in a car accident where the other driver is at fault, their liability coverage should cover your medical expenses. But if the other driver is uninsured, uninsured motorist coverage would cover your medical bills.
A similar coverage, underinsured motorist coverage, pays your medical bills when the other driver is at-fault but doesn't have enough liability insurance to cover your costs.
As with other kinds of auto insurance, these types pay up to the limit you have chosen. Buying low limits can mean you still have unpaid bills after an expensive car accident.
Medical payments coverage and personal injury protection
Medical payments coverage (MedPay) covers medical expenses of you and your passengers no matter who was at fault. This can include an ambulance, surgery and X-rays. It's not available in all states.
Personal protection coverage (PIP) will also help cover medical expenses no matter who was at fault. Some states require PIP insurance. In other states, it's optional or not offered. PIP insurance can also pay for lost wages and for hiring help for tasks you can't do because of an accident, such as child care.
Auto insurance extras
If your vehicle is out of commission because it's in the repair shop, you may have to rent a car. Rental auto reimbursement insurance helps cover the cost of a rental car if the repairs are being covered under your insurance.
Usually, rental cars reimburse have daily and maximum limits under this coverage. So make sure you understand the reimbursement limit before you rent a luxury SUV for a week. If you exceed the rental coverage limit, you can pay the difference yourself.
This is not the same as rental car insurance, which covers cars you rent for vacations and other non-accident purposes. You can usually get that coverage as part of a car insurance policy, through a rental car company or with the credit card you use for a rental.
Roadside assistance insurance can pay for services such as help changing a tire, bringing you gas or lock-out assistance. If you already have roadside assistance from your car maker or a AAA membership, you don't need this insurance.
If your car gets totaled (or stolen) and you make a collision or comprehensive claim, your insurance company will pay you a settlement based on the actual cash value (ACV) of the vehicle. But this settlement may not be enough to pay off your auto loan or lease balance. This could leave you upside-down on your loan or lease.
If you have gap insurance, it will cover the difference between the settlement and the amount you still owe on the vehicle. Some lenders require gap insurance if you financed the car. If you have a lease, it might already be included in the cost.
Cheapest Companies for Full Coverage Car Insurance
Car insurance rates for the same coverage vary widely among insurance companies. That’s true whether you’re looking to buy your state’s minimum requirements or get full coverage. The best way to find a good policy at a decent price is to compare car insurance quotes.
Here are the average rates for full coverage car insurance.
As you can see, you could potentially save hundreds of dollars each year by shopping around. The best cheap car insurance companies have competitive rates for a variety of drivers, like good drivers, drivers with poor credit, drivers with a speeding ticket and drivers with an at-fault accident on their driving records.
How to Get Cheap Full Coverage Car Insurance
No matter what auto insurance options you choose, you don't want to overpay. Here are ways to lower your bill and find affordable full coverage car insurance.
Before you purchase a policy, shop around for car insurance quotes. Make sure your quotes include the same coverage types and limits so that you're comparing apples-to-apples costs. Comparison shopping alone can potentially save you hundreds of dollars.
Take higher deductibles
An car insurance deductible is the amount from an insurance check. Collision and comprehensive insurance have deductible choices such as $500, $1,500 and $2,000. When you raise your deductible amount you should save some money. There's no deductible on liability insurance.
Maintain good credit if possible
Many auto insurance companies use credit as a factor in pricing policies. They use a credit-based insurance score, which is slightly different from a regular insurance score. Insurers believe that credit can be used to predict whether you'll make claims. Improving your overall credit history should in turn improve your credit-based insurance scores. Not all states insurances allow to use credit-based insurance scores.
Take advantage of discounts
Car insurance discounts for bundling multiple policies and insuring more than one vehicle are common. You'll also likely find low mileage discounts, safe driver discounts and price breaks for everything from going paperless to setting up automatic EFT payments.
Your car insurance policy is only as good as your next claim. If you've bought minimal coverage you can find yourself stuck with repair and medical bills to pay out of pocket. Buying ample car insurance is a way to protect the financial future you're building.
Is a Full Coverage Policy Worth It?
Full coverage car insurance offers you the most protection. It goes beyond state minimum liability insurance. Having full coverage car insurance gives you much better financial protection than buying only the state minimum for liability insurance.
Liability car insurance alone won't cover your own vehicle from problems, such as hitting an object, floods, fire and car theft.
If your car isn't worth much, you may decide to skip comprehensive and collision coverage. But if you decide to go with liability-only car insurance only, you should realize that you won't get help from your insurance company if your car is damaged. Instead, you have to pay for any repairs if you're in an accident and won't get any compensation if a thief steals your car.