Full Coverage Car Insurance

The main difference between full coverage and liability insurance is that full coverage pays for damage to the policyholder's vehicle in addition to injuries and property damage caused to others. Liability insurance only covers the cost of others' property damage and injuries in accidents that the policyholder causes. Liability insurance is required in most states, while full coverage insurance is only required for drivers who are leasing or financing their cars.

Differences Between Full Coverage and Liability Insurance 

Types of Insurance Commonly Included in Full Coverage 

Comprehensive

Comprehensive insurance pays for damage to your vehicle caused by something other than an accident, such as vandalism. It is only required if you are leasing or financing a car.

Collision

Collision insurance pays to repair or replace your vehicle if it is damaged in an accident, regardless of fault. It is only required if you are leasing or financing a car.

Personal Injury Protection (PIP) and MedPay

Personal injury protection and MedPay cover your medical expenses after an accident, regardless of fault. PIP is required in 14 states, and MedPay is required in two.

Uninsured/Underinsured Motorist

Uninsured/underinsured motorist coverage pays for your expenses after an accident caused by a driver with little-to-no insurance. It is required in 18 states and the District of Columbia in some form.

Should You Get Liability or Full Coverage?   

You should get full coverage insurance as a precaution if you can afford it. No matter how good of a driver you might be, your vehicle is likely going to get damaged in some way or another. Having full coverage insurance will provide a wide financial safety net that will alleviate some of the burden that comes with handling car issues.

However, if you're worried about the value proposition, a good rule of thumb is to consider dropping full coverage if the cost exceeds 10% of your vehicle's value.

Full coverage insurance costs $1,746 annually, on average. Full coverage car insurance is more expensive than the legal minimum auto insurance coverage because full coverage usually refers to a policy that includes collision and comprehensive insurance as well as the minimum coverage required by a state.

The cost of full coverage car insurance varies based on the state, the driver's chosen coverage limits, the driver's risk factors, and the vehicle's value. Additionally, comprehensive and collision insurance are subject to a deductible, and drivers can select a higher deductible in return for a lower premium. Drivers can also minimize the cost of full coverage car insurance by comparing rates and checking for discounts.

Cheapest Full Coverage Insurance Companies

1. Esurance - $1,548 per year
2. Geico - $1,675 per year
3. USAA - $2,002 per year
4. MetLife - $2,391 per year
5. Mercury - $1,919 per year

The difference between comprehensive and full coverage is that comprehensive insurance is just the part of full coverage that covers damage to a car from things other than accidents, like theft or fire. Full coverage usually means a car insurance policy with comprehensive, collision, and the state's minimum requirements.

Comprehensive insurance mostly covers events outside of a driver's control, or incidents that happen when a car is parked. For instance, comprehensive covers vehicle damage or replacement due to natural disasters, extreme weather events, and vandalism. When combined with collision insurance, these two types of insurance cover most incidents that could damage your car, hence the designation “full coverage.” Comprehensive and collision coverage are not mandatory in any state, but some lenders and lessors will require them on a leased or financed car.

Since every state has different car insurance requirements, full coverage can also include several other types of coverage. For example, personal injury protection (PIP) and MedPay are required in certain states, and would therefore be included in full coverage in these locations.  

Finally, remember that even a supposedly full coverage policy will not cover everything. Things like rental car reimbursement while your own car is being repaired or replaced are available separately and aren't usually included in the term full coverage.

When shopping for insurance, it's best to look past labels like full coverage and instead consider your state's laws and your own financial situation. And if an insurance agent or broker offers to sell you full coverage, be sure to clarify exactly what's included.

You do not need full coverage insurance on a used car unless the vehicle is leased or financed. Even though no state requires full coverage insurance, is still recommended for a used car if you cannot afford to repair or replace the car after an accident or other unexpected event. Full coverage is not an official type of insurance, but it usually refers to a policy that includes collision and comprehensive coverage in addition to the state's minimum required car insurance.

When deciding if you should buy full coverage insurance for a used car, consider the car's value, your savings, and where you live. For example, dropping full coverage could be worth it if you have an emergency fund that could comfortably cover the cost of repairs or a new car. But even if you could cover the loss yourself, it's wise to keep full coverage if your car is particularly valuable or you are especially likely to file a collision or comprehensive claim.

A general rule of thumb is to drop full coverage when the combined collision and comprehensive premium equals 10% of your car's value. But a lot depends on your own financial situation and vehicle.

You need full coverage if your car is leased or financed. Full coverage car insurance is not mandatory in any state, but lenders and lessors generally require it, and it is a good idea to maintain full coverage if you cannot afford to repair or replace your car in the event of a total loss.

You should also consider your car's value and your location when deciding if you need full coverage. If you own your car outright but it's particularly valuable, your full coverage premium is likely a good investment compared to the car's worth. Similarly, even if you could afford to repair or replace the vehicle, it's smart to keep full coverage if you live in an area with frequent collisions or thefts. After all, full coverage usually refers to a policy that includes collision and comprehensive coverage in addition to the state's minimum required insurance.

If you are trying to save on your premium but cannot drop full coverage, you might be able to raise your deductible, as long as it isn't dictated by your insurer or lender. But bear in mind that you should always choose a deductible that you'll be able to afford in the event of a claim.

Yes. You need gap insurance if you have full coverage and still owe money on a car loan or lease. Gap insurance is needed on top of full coverage because the types of insurance that go into full coverage do not cover the difference between what you owe on a loan/lease and the car's actual cash value, like gap insurance does.

Gap insurance – short for guaranteed asset protection insurance, and sometimes called loan/lease payoff coverage – protects you financially from having to cover the cost of depreciation, or the difference between what you still owe on your contract and what your insurance company says the vehicle is actually worth today. Collision and comprehensive protection – the main components of full coverage, along with liability insurance – won't cover that. As a result, you need gap insurance even if you have full coverage, especially if your situation leads to a relatively large gap to cover

When You Need Gap Insurance If You Have Full Coverage

• You're financing/leasing a new vehicle for a long term (60+months).
• You made a small down payment on a new vehicle (less than 20%).
• You rolled over negative equity from a previous auto loan.
• You financed a vehicle that has a high depreciation rate.
• Your contract has a high interest rate.
• Your lender or lessor requires gap insurance.

It's important to remember that while gap insurance isn't required by any insurer or state, having gap insurance on top of full collision and comprehensive coverage will probably be required by your lender if you're financing/leasing a new vehicle, and even some used vehicles. In addition, gap insurance is meant specifically for drivers who still owe a balance on their vehicle, so if you own your car outright and have full coverage, you don't have a need for gap insurance.

Yes, you need full coverage on a financed car. Any reputable lender will require drivers with a loan or a lease to purchase comprehensive and collision insurance for their vehicle in addition to the state's minimum requirements for car insurance. Your contract with the lender might even require you to choose a specific deductible to ensure that you will be able to pay it if you file a claim.

Full coverage is required on financed cars to protect the lender's investment. This applies regardless of whether the vehicle is new or used.

When buying full coverage insurance for a car with a loan, you should notify your insurer that the car is financed, because your lender will need to be listed on the policy. As a result, your lender will be notified when your policy expires, is renewed, or is canceled. When your loan ends, you can notify your insurance company in order to have your lender removed from the policy.

If you purchase full coverage and then fail to maintain it, your lender may be able to purchase expensive force-placed insurance or even repossess your car. The good news is that having an auto loan is not considered a risk factor for insurers, so the loan itself will not increase your insurance premiums. Full coverage is more expensive than maintaining only your state's mandatory minimum coverage, though.

You can find affordable full coverage by checking out WalletHub's page on cheap car insurance and our guide to car insurance discounts.

The difference between full coverage and the combination of comprehensive and collision insurance is the addition of state-mandated liability insurance and, in some cases, coverage for a driver's medical care. Full coverage is generally defined as comprehensive and collision insurance plus a state's minimum car insurance coverage.

While comprehensive and collision coverage are not required by state laws, they are usually required on a leased or financed vehicle. Collision coverage pays for damage to the policyholder's vehicle from an accident, regardless of fault. Comprehensive insurance, which is sometimes considered “bad luck” insurance, covers events outside of a driver's control, like natural disasters and damage from animals. Because “full coverage” implies that everything is protected, comprehensive and collision are usually considered part of it.

The last component of full coverage insurance is a state's minimum required insurance coverage. Almost every state requires liability insurance, which pays for damage the policyholder causes to other people and their property. In addition, some states require coverage that pays for the policyholder's injuries in the event of a crash.

No, you do not need full coverage on a paid off car. Full coverage car insurance is only necessary when a car is not paid off yet and the lender requires full coverage, as there isn't a legal requirement to carry full coverage anywhere in the United States. Insured drivers always have the option to add full coverage to their paid off car if they want to, though, and it can be a good idea.

For example, you should have full coverage on a paid off car if you want to make sure your insurance will pay for the car to be repaired or replaced, especially if the unexpected expense would be a financial hardship. Without the collision and comprehensive insurance that's usually part of full coverage, you'll have to pay for damage to your vehicle yourself in the event of an accident, theft or other incident.

You should also take the age, mileage, and replacement cost of your vehicle into consideration when debating whether or not you need full coverage on a paid off car. If you own an older car, full coverage might not make sense financially because the vehicle isn't worth as much anymore.

Ultimately, there's no universally right or wrong answer when it comes to whether or not you need full coverage on a paid off car. Your decision should depend on several factors, including your personal financial situation, your driving habits, and the vehicle itself. Talk to your insurance provider to discuss what would be best for you.

The price of full coverage insurance from Geico is $1,382 per year, on average. This puts the cost of Geico's full coverage car insurance below the national average among major insurance companies. However, it is still more expensive than Geico's minimum liability coverage options, which cost an average of $492 per year.

Full coverage is more expensive because it includes liability insurance, plus coverage for yourself and your own vehicle. There is no exact definition for full coverage insurance, but it generally refers to a combination of liability, collision and comprehensive coverage.

Although full coverage insurance costs more than minimum coverage, there are still ways to save on your premium while maintaining a large financial safety net. For example, Geico offers a variety of discounts based on different factors including driving history and vehicle safety features. You could also choose a higher deductible, which would give you a lower monthly premium. However, you'll pay more out of pocket if you do get in an accident.