What Is “Full Coverage” Car Insurance?

When shopping for auto insurance, you will not find the term Full Coverage in an official sense. It is not an automobile industry term. It’s the term insurance companies use that tells you that you have each part of insurance that is generally offered. It is usually comprised of Liability Coverage, which is Bodily Injury and Property Damage.

Then there is Comprehensive and Collision. In some states Full Coverage will include Uninsured/Underinsured Motorist. Full Coverage will usually cost around $205 per month depending on where you live.

Liability

Liability Insurance is your standard insurance policy and is mandatory in most US states. It consists of two parts, Bodily Injury and Property Damage. Both of these parts pay for losses that occur to the other party. It does not cover your injuries or damage. This is why it is the minimum standard.

Collision

This portion will cover you in the event of an accident. It is for the damage that other drivers cause to your vehicle. It’s not mandatory if you do not carry a lease or have paid off your vehicle from a lease. However, it is encouraged if you have modified your vehicle making it worth more than what the blue book value is.

Comprehensive

Comp Coverage protects against anything other than an accident. If your vehicle is broken into, stolen, or if you have storm damage, this is the part of insurance you would file a claim under. Without this level of coverage, you would pay out-of-pocket to replace or repair your car.

Full Coverage is also composed of additional coverage options, such as:

Medical Payments / PIP

Pays for medical bills for you due to an accident regardless of who is at fault in an accident. In some states, this is mandatory coverage.

Roadside Assistance

Pays a portion of the costs for breakdowns, flats, and towing charges from the scene. This is usually on a reimbursement basis.

Rental Reimbursement

When your vehicle is being repaired due to a covered event, you are given an allowance toward a rental vehicle. This too is on a reimbursement basis.

GAP insurance

This is one of the most important parts of a new vehicle purchase. Once you drive off the lot, your vehicle begins to lose its value. Within the first year, a car loses 20% of its value, 60% within five years. With GAP insurance if you were to experience a total loss, the policy will pick up where your Full Coverage insurance leaves off.

New car replacement coverage

Similar to GAP insurance, an insurance policy can either pay to put you in a similar vehicle to what you lost or the latest year model.

Here is a list of the primary coverage types and how they work. Always remember, a policy will pay out up to its policy limits. Once the damages exceed policy limits, that overage becomes your responsibility.

Do You Need Full Coverage?

Having insurance is mandated in all but a handful of states, but the level of coverage is dependent on the driver. State-mandated insurance will usually be liability only. For Full Coverage, you will need it in these scenarios

Financing A Vehicle

When purchasing an automobile from a dealership, the finance company will normally require Full Coverage auto insurance to protect their investment. This insurance will often offer additional coverage such as GAP insurance that will protect you in the event of a total loss because Full Coverage may not cover the entire amount of how much you still owe on the vehicle.

Force-Placed Insurance

This insurance also applies to those who are under a lease, however, instead of the driver shopping for coverage, the finance company purchases the policy and adds the premium amount to the vehicle purchase price. You will be locked into whatever policy type they offer.

Wanting Protection For Your Car

After a leased vehicle is paid off, you are no longer under the obligation to carry Full Coverage. At this point the vehicle’s worth is also diminished and carrying Full Coverage could also cost more than the vehicle is worth. However, if you have modified your vehicle or if you can’t afford to pay out of pocket to replace your car, then you can keep your Full Coverage.

How Much Is Full Coverage Car Insurance?

The national average for Full Coverage car insurance is $2,458 per year. However, many factors can change this amount. Where you live is the primary factor. Each state has its own contributory factors that either raise or lower car insurance costs.

• Crime rate
• Natural disasters
• Theft
• Non-Insured rat

Then insurance will depend on personal factors such as:

• Age
• Gender
• Where you live
• Type of vehicle you drive
• How much you drive
• Driving history

Full Coverage auto insurance is impacted by all of these factors. When compared to Liability-Only, a driver is still expected to meet the same stipulations. The average cost for a Liability-Only policy is $776 per year or $65 per month.

Average Cost Of Full Coverage By Company

To calculate Full Coverage, companies look at multiple factors. They will look at a drivers:

• State they live in and zip code
• Driving history
• Claim history
• Age and gender
• The type of car you drive
• Credit score

Let’s look at some rates from the top ten national companies.

Average Cost By State

As we mentioned, the national average for Full Coverage car insurance is $2,458 per year or about $205 per month. However, where you live will impact how much you will pay. The cause for the varied costs can range from cost of living, local traffic conditions, or an increase of claims from an area.

Florida

In Florida, Full Coverage is the most expensive at $314 per month. This is primarily due to the frequency of claims and the increased likelihood a driver will at one point submit a claim due to weather risks. Florida also has one of the highest uninsured rates at 20%. With the frequency of accidents with an uninsured driver, it drives up the cost of insurance for those who have insurance.

Pennsylvania

Let’s talk about the opposite end of the spectrum. Pennsylvania has a lower premium, $173 per month, for Full Coverage insurance. This reflects having one of the lowest percentages of uninsured drivers. Only 6% of drivers in the state do not have auto insurance. PA also does not have the natural weather risk that coastal states such as Florida and the Carolinas have with hurricanes.

Here is the average amount one would pay for Full Coverage auto insurance for each state for 2024.

Average Cost By Age

Age can have a tremendous impact on the cost of Full Coverage auto insurance. For example. Full Coverage from Geico for a 40-year-old male in Texas is $213. The same level of coverage for a 20-year-old increases the premium to $413.

This is for a clean driving record. Insurance companies see that younger drivers carry certain risks.

As you can see, there is a wide range of premium differences here; location is not the only factor to Full Coverage car insurance costs.

Is Full Coverage Car Insurance Worth It?

In most cases, if you are leasing your vehicle, you will be required to carry Full Coverage car insurance. This is the way leasing companies protect themselves from loss.

The same can be said for you. If you have a vehicle and rely on it, then investing in Full Coverage car insurance can be worth it because if anything were to happen to your car, the risk would fall on the insurance company and not on your bank account.

Full Coverage vs Liability-Only

Liability-Only coverage consists of Bodily Injury and Property Damage and only covers the other driver in an automobile incident. Full Coverage adds you to the equation adding Comprehensive and Collision and, in some states, includes Uninsured/Underinsured Motorist.

Collision covers your property and injuries in the event of an accident. Comprehensive covers damages from anything that is not an accident.

Full Coverage Vs Comp Coverage

Comprehensive coverage covers damages that result from anything that is not an accident. This could be from vehicle theft, a branch from a tree falling on your vehicle, or storm damage. One of the parts of Full Coverage is Comprehensive coverage.

How Do You Know If You Have Full Coverage?

The best way to find out if you have Full Coverage is to contact your insurance company. You can do this by logging into your online account or calling customer service. You can also review your policy documents. While they won’t directly say ‘you have Full Coverage’, but you can see which coverages you currently have.

Do You Need Full Coverage On An Older Car?

After your vehicle is paid off, especially if it is five years or older, chances are you no longer need to carry Full Coverage. You don’t want to pay more for Full Coverage than your car’s value. Here are a few things to consider in your decision:

• Have you modified the vehicle? Adding expensive parts like a new engine, wheels, or other enhancements could increase the vehicle’s value.
• Is it your only mode of transportation? If losing your car would put a strain on your family, then you may want to consider keeping Full Coverage.