Car Insurance, coverage types
Full Coverage Car Insurance: What It Covers and How Much It Costs
Full coverage usually means liability plus collision and comprehensive. See what that includes, what it leaves out, what it costs and when to keep it.
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Key takeaways
- Full coverage is an informal phrase, not a policy type. It usually means liability plus collision plus comprehensive.
- It does not automatically include uninsured motorist coverage, medical coverage, rental reimbursement or gap coverage.
- Lenders and leasing companies generally require collision and comprehensive until the car is paid off.
- A policy with all three coverages averaged $1,613 in 2024, about twice the average for liability alone.
- Roughly three in four insured vehicles carry collision coverage, by our calculation from NAIC data.
In this guide
Full coverage car insurance is not an official type of policy. It is a common shorthand for a policy that combines liability, collision and comprehensive coverage, so that both the damage you cause to others and the damage to your own car are insured. Regulators warn consumers that no policy called full coverage actually exists 1, and the phrase can give the impression that everything is covered. It is not.
What full coverage usually includes
| Coverage | What it pays for | Who requires it |
|---|---|---|
| Liability | Injuries and property damage you cause to others | State law, in nearly every state |
| Collision | Damage to your car from a crash with a vehicle or object, or a rollover 2 | Lenders and leasing companies |
| Comprehensive | Theft, fire, flood, vandalism and other damage that is not a collision 3 | Lenders and leasing companies |
Each has its own guide: liability, collision and comprehensive.
What it does not automatically include
Because the phrase has no fixed definition, two policies both described as full coverage can differ in important ways. Check for these on your declarations page.
| Coverage | What it does | Part of full coverage? |
|---|---|---|
| Uninsured and underinsured motorist | Pays your losses when the at-fault driver has no insurance or too little | Only where the state requires it, or if you add it |
| Personal injury protection or medical payments | Pays medical costs for you and your passengers | Only where the state requires it, or if you add it |
| Rental reimbursement | Pays for a rental car while yours is repaired after a covered claim | Only if you add it |
| Roadside assistance | Towing, jump starts and lockouts | Only if you add it |
| Gap coverage | Pays the difference between the car's value and your loan balance after a total loss | Only if you add it |
When someone offers you full coverage, the right response is to ask which coverages, with what limits and what deductibles.
Who needs it
Anyone with a loan or lease. If you still owe money on the car, the lender will require collision and comprehensive 3. The lender's interest in the car is protected along with yours, and the loan agreement may set a maximum deductible.
Anyone who could not replace their car out of pocket. If a crash or theft would leave you without transport and without the money to fix that, these coverages do the job they were designed for.
Owners of newer or higher-value cars. The potential payout is large compared with the premium.
By our calculation from NAIC figures, about 76 percent of insured vehicles carried collision coverage in 2024 and about 79 percent carried comprehensive 4. Most drivers, in other words, insure their own car as well as their liability.
How much full coverage costs
The NAIC calculates a combined average premium for a policy containing all three coverages. For 2024 it was $1,613 4.
| Coverage | 2024 average premium |
|---|---|
| Liability | $813.27 |
| Collision | $516.39 |
| Comprehensive | $283.15 |
| Combined | $1,612.81 |
Source: NAIC 4.
On average, then, adding collision and comprehensive to a liability policy added about $800 a year, roughly doubling the cost. Your own figures depend heavily on the car. A new, expensive or frequently stolen model costs more to cover than an older, modest one. For the full range of pricing factors and state figures, see how much car insurance costs.
How a full coverage claim pays
Collision and comprehensive do not have a dollar limit that you choose. The most they pay is tied to what the car is worth 3, and every claim is reduced by your deductible.
- Repairable damage: the insurer pays the repair cost, minus your deductible.
- Total loss: the insurer pays the car's actual cash value just before the loss, minus your deductible.
Example
Your car is totaled. Its actual cash value is $18,000, your deductible is $500 and you owe $21,000 on the loan. The insurer pays $17,500. You still owe the lender $3,500. Gap coverage, if you had bought it, is designed to pay that kind of difference. These numbers are an illustration.
When to keep it and when to drop it
| Your situation | What it suggests |
|---|---|
| You have a loan or lease | Keep it. Your contract requires it |
| The car is worth much more than a year of collision and comprehensive premiums | Keep it |
| You could not afford to replace the car | Keep it, possibly with a higher deductible |
| You own the car, its value is low and you have savings to replace it | Consider dropping collision, comprehensive or both |
To run the numbers, subtract your deductible from the car's market value. That is the most a claim could pay. Compare it with what the two coverages cost you each year. Our guide to cheap car insurance works through an example.
You do not have to make the same decision for both. Some drivers keep comprehensive, which is usually the cheaper of the two and covers theft and weather, after dropping collision.
What full coverage still does not cover
- Mechanical or electrical breakdown
- Normal wear, such as tires and brakes
- Personal belongings stolen from the car, which are usually a matter for a homeowners or renters policy
- Using the car for deliveries or paid rides, unless you add coverage
- Damage you cause above your liability limits
The bottom line
Full coverage means liability plus protection for your own car. It is required while you have a loan or lease and sensible whenever losing the car would be a financial problem. Do not rely on the label. Confirm the coverages, limits and deductibles line by line, and add uninsured motorist coverage if it is not already there. The main car insurance guide explains how the pieces fit together.
Frequently asked questions
- Is full coverage required by law?
- No state requires collision or comprehensive coverage. States require liability coverage, and some require other coverages such as personal injury protection. Full coverage is usually required by a lender or leasing company, not by the state.
- Does full coverage cover everything?
- No. It does not cover mechanical breakdown, normal wear, personal belongings in the car or business use, and it pays only up to your limits and after your deductible. Coverages such as uninsured motorist, rental reimbursement and gap coverage must be added separately.
- When should I drop full coverage?
- Consider it when you own the car outright, its value minus your deductible is small compared with the yearly cost of collision and comprehensive, and you could afford to replace the car yourself.
- Does full coverage pay off my loan if the car is totaled?
- Not necessarily. Collision and comprehensive pay the car's actual cash value, minus your deductible. If you owe more than the car is worth, you remain responsible for the difference unless you have gap coverage.
- What is the difference between liability and full coverage?
- Liability pays for damage and injuries you cause to others. Full coverage adds collision and comprehensive, which pay for damage to your own car.
Sources
Numbers in the text point to these publications. Links open the original source.
- National Association of Insurance Commissioners (NAIC), republished by the Nebraska Department of Insurance. A Shopping Tool for Auto Insurance
- Insurance Information Institute (Triple-I). What is covered by a basic auto insurance policy?
- Texas Department of Insurance. Auto insurance guide
- National Association of Insurance Commissioners (NAIC). 2024 Auto Insurance Database Average Premium Supplement (published September 2026)
Related guides
- Collision Car Insurance: What It Covers and When You May Need It
Collision insurance pays to repair your car after a crash, whoever was at fault. See what it covers, what it costs and how to decide whether to keep it.
- Comprehensive Car Insurance: What It Covers, Exclusions and Costs
Comprehensive covers theft, weather, fire, flood, vandalism and animal strikes. See what it excludes, what it costs by state and whether you need it.
- Liability Car Insurance Explained: Coverage, Limits and Costs
What liability car insurance covers, how to read limits such as 30/60/25, what each state requires, what it costs on average and how much to carry.
This guide is general educational information, not insurance, legal or financial advice. Insurance rules and prices vary by state, company and personal circumstances. Confirm anything important with your state insurance department or a licensed professional. Read the full disclaimer.