What Is Considered Full Coverage Car Insurance?

October 30, 2023

As per Insurify’s report, auto insurance rates have surged by 17% during the first half of 2023. To cut costs, 51% of drivers opt for the bare minimum coverage mandated by their state’s laws. The remaining 49% of drivers still prefer full coverage car insurance because it ensures all-encompassing protection.

Many auto insurance owners enjoy comprehensive coverage and additional perks in unexpected scenarios. This article will delve into what qualifies as full coverage insurance, what it costs, and the situations where it becomes indispensable.

Discover Potential Savings on Your Car Insurance

Full coverage car insurance can be more expensive than the minimum insurance required by your state’s laws. It’s important to understand that calculating the exact cost can be challenging because it depends on many factors. It’s best to contact an insurance agent directly to determine the most cost-effective option for you after analyzing your needs and potential risks.

For regions with challenging weather conditions or high crime rates, even basic liability insurance can be costly. Some insurance providers offer cheap full coverage car insurance with no down payment, but you should be cautious. Professional insurance companies always charge a fee for the first month to activate your policy.

By obtaining full coverage for your car, you can potentially save a significant amount in the long run. Unfortunately, no one is immune to accidents on the road. The minimum insurance required by law does not cover all situations in which you may incur damage. In contrast, completely covered insurance serves as your safety net in accidents, unforeseen weather conditions, or parking mishaps.

What Constitutes Full Coverage Insurance?

Many drivers resort to purchasing liability insurance to cover the damage and injuries they cause to other cars and people on the road without incurring unnecessary financial costs. But what does full coverage car insurance cover? It includes other additional insurance that is not always mandatory but provides protection for your property.

Purchasing full coverage car insurance requires you to choose deductible and specific limits. That’s also true for comprehensive and collision insurance, but there are no such requirements for liability insurance.

The deductible is a certain amount you will pay before your insurer covers the remaining costs. Its application depends on the type of compensation request you send to the insurance company.

So, what does full coverage mean? Let’s look at an example of such coverage with a deductible. Suppose your car sustained $1,500 worth of hail damage, and your deductible is $500. It means you will pay that amount, and the insurance company will reimburse you the remaining $1,000 for towing and repairs.

Types of Coverage Included in Full Auto Insurance Package

What is considered full coverage auto insurance? This contract option involves a combination of several coverages at once. Let’s consider their main types:

  • Liability insurance: You need it if you are the one who caused the accident. This policy protects you financially because it includes bodily injury and property damage liability coverage.
  • Collision insurance: It provides coverage in cases where your car is involved in a collision with another vehicle, tree, fence, wall, and more.
  • Comprehensive insurance: This insurance type can come in handy if your car is damaged in an incident other than a collision. These incidents include natural disasters such as flood damage, collision with a wild animal, vandalism, and car theft.

Legislation in some states may include additional types of coverage for full auto insurance:

  • Uninsured/underinsured motorist coverage (UM/UIM): This coverage helps handle expenses if you get in an accident with another driver who is uninsured but financially responsible for the incident or if the at-fault driver’s insurance is insufficient to fully cover your damages. UM also protects you in cases where you become a victim of a hit-and-run.
  • Personal injury protection (PIP): It covers medical expenses related to injuries you and your passengers sustained due to a road incident. PIP is one of the coverages required by no-fault state laws (such as New York, Hawaii, Florida, Kansas, Pennsylvania, Minnesota, North Dakota, and others). This insurance can compensate you for lost wages if you become temporarily disabled due to injuries. Additionally, it may cover your treatment costs if you’re hit by a car or involved in an accident while using someone else’s vehicle.
  • Medical payments (MedPay): This is also necessary to reimburse you and your passengers for the financial expenses incurred for medical services due to an accident. However, MedPay has more limited capabilities than PIP, and it does not cover lost wages.

Among drivers, there is a practice of obtaining two-way insurance, which provides reliable protection for vehicles. It covers damages you may cause to your or someone else’s car. This type of policy implies coverage in the event of an accident or other road incidents. Additionally, with 2-way insurance, you get protection in such unpleasant situations as hit-and-run, water damage, theft, fire, and similar events.

One of the popular inquiries is about transmission repair coverage. Here’s the question many drivers wonder about: “Does full coverage cover transmission repairs or expenses for repairing other vehicle components?”

Please note that this type of insurance only compensates for damage related to a road accident or another covered risk.

What Is the Cost of Full Coverage Car Insurance?

Now that we know what’s considered full coverage, let’s examine the pricing issue in detail. The cost of auto insurance varies by state, driving record, location, driving history, condition of the car, and more. Also, statistics show that premiums may increase or decrease from year to year in different states.

Characteristic202120222023
Michigan5,7404,3862,352
Rhode Island1,3751,1971,200
Nevada1,0331,1381,164
Florida2,3612,0721,092
New Jersey8129791,032
Delaware1,2001,1831,008
Connecticut1,1651,041960
Oregon1,050996948
New York1,3731,085924
Maryland1,0811,044900
Kentucky1,5491,027876
Louisiana1,1281,002876
Utah909793792
Arizona1,234902768
Massachusetts721784732
Illinois854717720
South Carolina939752720
Colorado865791720
Hawaii644637684
Minnesota1,043721684
Missouri690648672
New Hampshire745598648
Washington569593636
Georgia683727624
California614613600
Virginia618555600
Oklahoma611584600
Alabama669641600
West Virginia627650600
Texas926666576
North Carolina445492552
Mississippi734657540
New Mexico570550540
Arkansas554556540
Kansas583549492
Ohio528482492
Alaska491492492
Nebraska487552480
Indiana488489480
Pennsylvania587497480
Maine445452468
Tennessee509514444
Montana466502444
Wisconsin515396432
North Dakota512422408
Iowa408382408
Idaho559428408
Vermont535474384
Wyoming410422372
South Dakota424387336

Source: Statista

Forbes data for 2023 shows that the cheapest full-coverage car insurance is tracked in the following states:

StateAverage cost per year
Idaho$1,021
Vermont$1,037
Ohio$1,112
Maine$1,216
Iowa$1,238

The highest full-coverage car insurance quotes we see in the following states:

StateAverage cost per year
New York
  • $4,769
Florida
  • $4,326
Louisiana
  • $3,629
Pennsylvania
  • $3,600
Maryland
  • $3,349

But how much is full coverage car insurance in other states? A study published in Forbes Advisor demonstrates the average annual cost for all states, including:

  • Texas – $2,938
  • Illinois – $2,345
  • Arkansas – $1,961
  • Tennessee – $1,720
  • Mississippi – $1,704
  • Oregon – $1,459
  • Indiana – $1,454, and others

When assessing the cost of your full coverage car insurance, providers also take your age into account. For example, here are the average annual amounts:

  • 19-year-old drivers – $3,708
  • 20-year-olds – $4,319
  • 25-year-olds – $2,473
  • 30-year-olds – $2,125

The more driving experience and the fewer incidents in your driving history you have, the lower the rates offered to you. Additionally, the size of the premiums depends on the insurance company itself. Through our research, we found that cheap full-coverage car insurance is available at companies such as:

  • Auto-Owners – $1,628
  • GEICO – $1,716
  • Westfield – $1,759
  • Travelers – $1,852
  • State Farm – $1,959

The highest annual rates for full coverage car insurance were found at Mercury ($3,233). The second and third positions in terms of the price for a similar offering are Allstate ($3,000) and AAA ($2,880).

In What Cases Do You Need Full Auto Insurance?

We’ve answered the question, “What does full coverage car insurance mean?” Now, it’s time to look at the situations in which you need it. There are at least three instances where such insurance can potentially save you money and give you peace of mind:

  • New/rented car: When buying or renting someone else’s car, full coverage will keep your money safe in case of an accident.
  • Financed car: Banks and creditors require minimum coverage on the car you’ve purchased to protect themselves. Your car is an asset of the financial institution, which can be repossessed if you fail to fully pay off the loan. Typically, financial institutions require liability insurance, comprehensive insurance, and collision insurance. So, the answer to the question, “Do you have to have full coverage insurance when financing a car?” can be obtained directly from your lender or bank consultant.
  • Expensive vehicle: Premium or exclusive car models usually require much more money for repairs or restoration. Therefore, full coverage will help you recover damages not only incurred after accidents but also other unfortunate events such as theft, vandalism, or fire.
  • Area with challenging driving conditions: It is suitable for those living in areas prone to weather disasters or high crime rates. In such cases, full coverage car insurance will protect you from unexpected expenses.

Comprehensive auto coverage is a comprehensive protection of your budget and psychological health from any unforeseen situations. When selecting it, focus on your personal needs, financial condition, vehicle value, area of residence, and level of exposure to risks. Also, compare offers from several insurance companies at once to be able to find the most favorable rates and get the coverage you need.

Frequently Asked Questions

Is a full coverage policy worth it?

It all depends on your situation and needs. However, full coverage car insurance can help you get the actual value of your car if it is in disrepair after an accident. It can also cover damages to you and your passengers and reimburse you for medical expenses due to an accident on the road.

Do I need full coverage insurance on a used car?

Yes, in most cases, banks require full auto insurance for the life of the loan. This requirement is explained by the fact that your car technically remains lender’s possession until you make the last installment. Therefore, insurance is necessary to protect its financial assets.

Does full coverage car insurance replace your car?

Yes, it does. In cases where your car is stolen or totaled in an accident, car insurance full coverage will help reimburse you for its current value.

Do I have to have full coverage insurance on a financed car?

No state requires full auto insurance on a used car. When you evaluate the potential risks, it’s up to you to decide whether you need minimum or full coverage.

Victoria Berezhetska

Victoria Berezhetska is a Content Lead at Phonexa.com and an expert contributor to CoverExplore. She has a Bachelor of Science degree in Business Administration, with extensive working experience as a PR specialist and content writer. At CoverExplore, she helps customers find the right educational material through easily digestible blog posts and buying guides backing their insurance coverage choice. Victoria covers diverse topics around digital and insurance marketing, including auto, home, health, and life insurance.

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