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CAR INSURANCE INSIGHTS

No insurance policy covers everything that can happen to your car or unlimited liability in case of an accident. Here's what's covered -- and what isn't.

No insurance policy can cover you and your car in every circumstance. But a 'full coverage car insurance' policy covers you in most of them.

Full Coverage Car Insurance

Insurance is meant to protect you from being sued, or left financially stranded by a totaled car, or ruined by an uninsured driver. That doesn't mean an accident won't leave you with expenses and hassles you wouldn't face otherwise.

Full coverage insurance is shorthand for car insurance policies that cover not only your liability but damage to your car as well. Here's how to weigh liability vs. full coverage.

KEY TAKEAWAYS
  • Full coverage is an insurance term that refers to a collection of coverages including liability, collision and comprehensive.
  • The average cost for a full coverage policy with higher limits is around $1,150 more than a bare minimum policy.
  • A full coverage policy depending on state laws may also cover uninsured motorist coverage and a medical coverage of personal injury protection or medical payments.
  • A typical full coverage insurance policy will not cover you and your car in every situation. It has exclusions to specific incidents.

What is full coverage car insurance?

What is considered full coverage insurance to one driver may not be the same as even another driver in the same household.

There is no such thing as a “full coverage” insurance policy; it is simply a term that refers to a collection of insurance coverages that not only includes liability coverage but collision and comprehensive as well. In general, most drivers consider full coverage auto insurance to mean that you have purchased not only mandatory state coverages, such as liability insurance – which is required virtually everywhere and pays for the damage you inflict on other people and property but comprehensive and collision as well.

Ideally, full coverage means you have insurance in the types and amounts that are appropriate for your income, assets and risk profile. The point of all types of car insurance is to keep you from being financially ruined by an accident or incident.

If you want to go above and beyond what a normal full coverage policy entails, you can buy a policy with every conceivable car insurance option available. If you so feel like shelling out the money you can get a lot of protection. A fully loaded policy may look like this if you went for nearly every option available:

  • The highest available liability limits (usually $250,000 per person bodily injury, $500,000 per accident, $100,000 property damage)
  • Collision and comprehensive coverage - Limits are the value of your vehicle.
  • Uninsured motorist coverage - Uninsured/underinsured motorist bodily injury coverage with limits matching your liability coverage.
  • Uninsured motorist property damage - Pays for damages to your car if an uninsured motorist damages it (not available in all states).
  • All available medical coverages in the highest amounts possible (personal injury protection in no-fault states and medical payments coverage in most others)
  • Rental reimbursement coverage
  • Towing and labor
  • Preferred-customer add-ons such as new car replacement programs or vanishing deductibles
  • Custom equipment - If you have a special paint job or other custom item you need specific coverage on.
  • Gap insurance - If you owe more on the vehicle than it is worth.

"In reality, there is no policy that will cover you and your car in every situation," says Penny Gusner, senior consumer analyst for Insurance.com. "If you don't have the money to buy all the offerings, then don't. Just make sure to buy what your state requires and the other coverages that are needed for your specific situation, such as comp and collision if your car is leased or financed."

What does full coverage insurance cover?

A typical full coverage policy has liability, plus comprehensive and collision coverages and depending on state law requirements may include uninsured motorist and a medical coverage of personal injury protection (PIP) or medical payments (MedPay).  These types of coverages cover:

  • The damage you do to others, up to your liability limits.
  • Your car, up to its fair market value, minus your deductible, if you are at fault or the other driver does not have insurance or if it is destroyed by a natural disaster or stolen (comp and collision)
  • Your injuries and of your passengers, if you are hit by an uninsured motorist, up to the limits of your uninsured motorist policy (uninsured motorist or UM).
  • Your injuries and those of your passengers, if you are at fault, up to the amount of your medical coverage (PIP or MedPay)

What doesn't full coverage cover?

Full coverage doesn't cover every situation you and your car may encounter. In fact, full coverage car insurance policies have exclusions to specific incidents. Each full cover insurance policy will have a list of exclusions, meaning items it will not cover.

Typical full coverage car insurance won't pay for certain events. Common exclusions are:

  • Racing or other speed contests
  • Off-road use
  • Use in a car-sharing program
  • Catastrophes such as war or nuclear contamination
  • Destruction or confiscation by government or civil authorities
  • Using your vehicle for livery or delivery purposes; business use
  • Intentional damage

Typical comprehensive and collision policies won’t cover every situation. Normal exclusions are:

  • Freezing
  • Wear and tear
  • Mechanical breakdown (often an optional coverage)
  • Tire damage
  • Items stolen from the car (those may be covered by your homeowners or renters policy, if you have one)
  • A rental car while your own is being repaired (an optional coverage)
  • Electronics that aren’t permanently attached
  • Custom parts and equipment (some small amount may be specified in the policy, but you can usually add a rider for higher amounts)

How much is full coverage car insurance?

Car insurance rates are very specific to the person who owns the car: Your age, driving record, credit history and location count as much as the kind of car you are driving. Rates also vary by hundreds or even thousands of dollars from company to company. That's why we always suggest, as your first step to saving money, that you compare quotes.

Here's a state-by-state comparison of the average yearly cost of the following coverage levels:

  • State-mandated minimum liability, or, bare-bones coverage needed to legally drive a car
  • Full coverage liability of $100,000 per person injured in an accident you cause, up to $300,000 per accident, and $100,000 for property damage you cause (100/300/100), with a $500 deductible for comprehensive and collision
  • You'll see how much full coverage auto insurance costs per month, and annually. You'll also see the difference in cost for full coverage compared to state minimum liability-only coverage.
  • The average annual rate for full coverage with higher liability limits of 100/300/100 is around $1,150 more than a bare minimum policy. If you choose lower liability limits, such as 50/100/50, you can save but still have decent protection.
  • The average monthly cost to boost coverage from state minimum to full coverage (with 100/300/100 limits) is about $97, but in some states it's much less, in others you'll pay more.

Full coverage car insurance cost by state

State Full Coverage Annual Average Rate State Minimum Average Annual Rate Difference yearly Difference monthly
Michigan$3,141$1,855$1,286$107
Louisiana$2,601$771$1,830$153
Nevada$2,402$717$1,685$140
Kentucky$2,368$669$1,699$142
DC$2,188$839$1,349$112
Florida$2,162$828$1,334$111
California$2,125$606$1,519$127
New York$2,062$867$1,195$100
Rhode Island$2,040$738$1,302$109
Connecticut$2,036$891$1,145$95
New Jersey$1,993$846$1,147$96
Montana$1,963$447$1,516$126
Colorado$1,948$553$1,395$116
Delaware$1,921$843$1,078$90
Georgia$1,865$684$1,181$98
Texas$1,823$538$1,285$107
Maryland$1,816$853$963$80
Oklahoma$1,815$418$1,397$116
Missouri$1,798$546$1,252$104
Arizona$1,783$578$1,205$100
Wyoming$1,782$328$1,454$121
Arkansas$1,763$449$1,314$110
Alabama$1,713$498$1,215$101
Pennsylvania$1,700$502$1,198$100
Kansas$1,689$464$1,225$102
Mississippi$1,684$413$1,271$106
West Virginia$1,654$541$1,113$93
South Carolina$1,653$617$1,036$86
South Dakota$1,643$323$1,320$110
Washington$1,620$537$1,083$90
Minnesota$1,619$614$1,005$84
New Mexico$1,604$479$1,125$94
Hawaii$1,589$485$1,104$92
North Dakota$1,577$423$1,154$96
Alaska$1,560$412$1,148$96
Illinois$1,538$493$1,045$87
Nebraska$1,500$393$1,107$92
Oregon$1,496$674$822$69
Tennessee$1,493$462$1,031$86
Utah$1,492$565$927$77
Massachusetts$1,466$520$946$79
North Carolina$1,425$438$987$82
Vermont$1,410$398$1,012$84
Iowa$1,352$326$1,026$86
Wisconsin$1,335$401$934$78
Idaho$1,285$377$908$76
Indiana$1,266$430$836$70
Virginia$1,196$380$816$68
Ohio$1,191$406$785$65
New Hampshire$1,086$424$662$55
Maine$1,080$355$725$60

*Methodology: The table shows the average annual rate for a 2019 Honda Accord culled from nearly all ZIP codes in the state from up to six major carriers. Data was provided for Insurance.com by Quadrant Information Services. New Hampshire doesn’t require drivers to have car insurance, but most drivers do, and we’ve listed what is mandated if you choose to carry coverage.


How to get cheap full coverage auto insurance?

The best way to find the cheapest full coverage auto insurance is to shop your coverage with various insurers. Insurance companies rate risk differently, which can result in dramatic differences in premium quotes. Here are a few tips to follow when shopping for cheap full coverage auto insurance:

Liability coverage: Make sure you are consistent when shopping your liability limits. If you choose $50,000 in bodily injury liability per person, $100,000 in bodily injury liability per accident and $25,000 in property damage liability per accident, always shop the same coverage levels with other insurers.

When it comes to liability, you should consider carrying higher limits than the state-required minimums as they are often not enough if you are involved in a serious accident.

Collision and comprehensive: These coverages are part of a full coverage package, so a premium quote will be necessary for these coverages as well. Both collision and comprehensive come with a deductible, so be sure always to choose the same deductible when shopping for coverage.

Choosing a higher deductible will push your premium lower, while a lower deductible will result in a higher premium. Always choose a deductible that you can easily afford in the event you have to make a claim.

Other coverages: There are other coverages that help make up a full coverage package. These coverages vary but can include:

  • Uninsured/underinsured motorist coverage
  • Personal injury protection
  • Rental reimbursement coverage
  • Towing
  • Gap insurance

If you need any of these additional coverages, always choose the same coverage levels and deductibles (if they apply), so you are comparing apples to apples when shopping for a new policy. Once you have found the right price and coverages for your needs, always be sure to check the financial strength of any insurer you are considering.

Can I drop full coverage auto insurance?

Analyzing our data, we found that roughly 40% of drivers who own a vehicle at least 10-years old are buying comprehensive and collision coverage. Other drivers may consider dropping these optional coverages as their car nears the end of its life. If you can manage such a loss -- that is, replace a stolen or totaled car without a payout from insurance -- do the math on the potential savings and consider dropping coverages that no longer make sense.

For example, a 25-year-old woman with a clean driving record living in Stirling, N.J., would pay about $1,302 a year for “full coverage” (50/100/50 liability, uninsured motorist, personal injury protection and comprehensive and collision coverage with a $500 deductible) on a 10-year-old Ford Focus. Dropping comprehensive and collision, she would pay about $806 a year – a savings of $496 a year.

Let's say her car is worth $4,450 as the “actual cash value” an insurance company would pay. If her car were totaled tomorrow and she still carried full coverage, she would get a check for $3,950 – the car's actual cash value minus her $500 deductible. In other words, she is paying $496 a year to protect herself against a $3,950 loss.

Of course, the car's value drops with each passing year, and so do the insurance premiums. At a certain point, most drivers would choose to accept the risk and bank the collision and comprehensive premiums because they would be unlikely to find a reliable replacement with the insurance payout.

Full coverage car insurance FAQ’s

How much is full coverage insurance on a new car?

There is no specific answer to this question as premiums can vary dramatically depending on your personal factors, where you live as well as the type of car you are driving. When we ran the numbers, we came up with a national average cost of full coverage car insurance of $1,428 for a full coverage policy, but pricing varies across the states.

For example, Louisiana's average premium came in at $2,839 in 2021, which is a shocking 99% more than the national average of $1,428. Maine has the cheapest full car insurance rate on the other end of the spectrum, with an average premium of $858 a year.

How much is full coverage insurance for 6 months?

Full coverage six-month rates will vary across states and various other factors but the national average for a six-month full coverage policy is $714.

Do you have to have full coverage insurance when financing a car?

In almost all cases, the answer to this question is yes. If you are financing your vehicle, your insurer will likely require that you carry full coverage to protect their investment in your vehicle.

Suppose you aren’t carrying comprehensive or collision coverage and your vehicle is destroyed in an accident by a severe weather event or other peril. In that case, you will not only have to purchase a new vehicle out of pocket, but you will also be paying off the loan on your destroyed vehicle as you were not insured.

Until you own your vehicle outright and can afford to repair or replace it, if necessary, you should be carrying full coverage insurance.

What is considered full coverage car insurance?

Technically, there is no such thing as a “full coverage” insurance policy. The term “full coverage” simply refers to a collection of insurance coverages that offer a wide variety of protections, essentially, protecting your car in “full.”

While “full coverage” can mean different things to different people, most drivers consider full coverage auto insurance to include not only mandatory state coverages, such as liability insurance but comprehensive and collision coverages as well.

With these coverages in place, you are protected if you injure another person or their property with your vehicle, and your vehicle is protected if it is damaged in an accident or by another covered peril such as fire, wind and even animal damage.

Who has the cheapest full coverage car insurance?

There is no real way to determine who has the cheapest full coverage car insurance as insurance premiums can vary dramatically even within the same neighborhood. Insurers consider a wide variety of factors when setting a premium, and many of those factors are personal, so rates can vary dramatically between drivers. Here are a few of the factors that insurers consider when setting a premium:

  • Your vehicle
  • Your driving record
  • How often you drive
  • Your location
  • Is your car garaged at night
  • Your credit score
  • Age and gender
  • The coverages, limits, and deductibles you choose

The best way to lower your premium is to gather full coverage car insurance quotes from various insurers. Always make sure you are comparing apples to apples when it comes to coverage levels and deductibles.

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