Many new vehicle owners assume that car insurance is a one-size-fits-all deal. Though car insurance is a bit more nuanced, most people end up deciding between two types of coverage: minimum coverage, which simply meets state requirements, and full coverage insurance, which offers more protection than is required by the state.
In this article, we’ll break down the differences between each type of coverage so you can make a better-educated decision about which car insurance policy is right for you. Whenever you shop for car insurance, we recommend getting quotes from the best car insurance companies to compare coverage and rates.
In this article:
- What's Included In Full Coverage Car Insurance?
- Average Cost Of Full Coverage Auto Insurance
- Full Coverage Car Insurance Vs. Minimum Coverage
- Top Providers Of Full Coverage Car Insurance
- FAQ About Full Coverage Car Insurance
What's Included In Full Coverage Car Insurance?
Full coverage car insurance is a combination of collision coverage, comprehensive coverage, and liability coverage. This means that in the case of a covered accident, full coverage car insurance will not only take care of the damages to your car, but the injuries and damages you may have caused.
Simply put, full coverage car insurance refers to a combination of car insurance policies that cover:
- Liability and legal fees for injury or damage to other people or properties
- Any of your own injuries or medical bills you might have after an accident
- Damage to your car and repair costs due to an accident or other similar event
- Any of your passengers’ injuries or medical expenses after an accident
- You and your passengers' injuries if you’re in an accident with an uninsured/underinsured driver
Liability Coverage Car Insurance
Liability coverage is typically broken into bodily injury liability and property damage liability. Bodily injury coverage, as the name implies, covers liability for any physical harm you may cause to another person, while property damage liability covers the cost for any damage you cause to another’s property. One or both of these types of liability coverage are typically required by state minimum requirements.
Most insurance companies will refer to both bodily injury and property damage liability coverage simply as liability insurance, so don’t get confused if you don’t see it specifically stated on your quote or policy.
Collision Coverage Car Insurance
Because car accidents are so common, it’s generally a good idea to get coverage for the damages that may occur if you get into one, and collision insurance does precisely that. Even if your car is totaled, some insurance companies will pay to replace it with a new one if the accident takes place within a certain time frame after purchasing your policy.
Comprehensive Coverage Car Insurance
Comprehensive insurance covers the replacement of or repairs to your car if it's stolen or damaged in a non-collision incident that is out of your control, such as physical damage from a storm, fire, theft, or vandalism. Comprehensive coverage is usually optional, but you may be required to carry it if your car is financed by a lender or leased.
To learn more about these kinds of coverage, as well as medical payments coverage (MedPay), personal injury protection insurance (PIP), and uninsured/underinsured motorist coverage (UM/UIM), check out our full article on the standard types of car insurance. This article will also give you details on optional coverages, such as gap insurance and roadside assistance services.
Additional Auto Insurance Coverages
While full coverage auto insurance typically refers to policies with liability, collision, and comprehensive insurance, drivers can opt for additional coverages. The following insurance options can provide extra protection after an accident:
- Uninsured motorist coverage
- Roadside assistance
- Towing coverage
- Rental reimbursement
Average Cost Of Full Coverage Auto Insurance
We found that car insurance costs an average of $1,732 per year nationwide for full coverage. The cheapest overall providers for car coverage are typically USAA, Erie Insurance, Auto-Owners, State Farm, Geico, and Progressive.
That being said, the average cost of full coverage car insurance depends on several factors:
- Your insurance provider
- Your vehicle
- Your deductible, with higher deductibles leading to lower rates
- Your driving record and age
- Your state
Car insurance rates are not standardized, so each provider is free to set its own rates. But why should your vehicle, driving history, and state affect your insurance premium?
It’s all about risk. Think of it like this: if you total a Tesla Roadster, it’s going to be far more expensive to replace than a Kia Rio. That means your car is a lot riskier to insure, so insurance providers need to hike up your premium to cover themselves for that risk.
Similarly, your state and driving history influence how much of a risk you are to your insurance company. If you’ve been driving for 20 years without so much as a traffic violation, you’re a lower risk to your insurance company. But if you’re a brand-new driver who has no history to back them up, and you’re living in Texas, the state with the highest number of crashes per year, your insurance company is going to need to charge you more.
Full Coverage Car Insurance Vs. Minimum Coverage Insurance
In some ways, the easiest way to understand the benefits of full coverage car insurance is to compare it to minimum coverage insurance.
Most state laws only require drivers to take out one of the three policies that make up full coverage car insurance: liability coverage. That means you’re covered against any injury or damage you may cause to other people and their property, but when it comes to your own injuries or damage to your vehicle, you’re out of luck.
If you get into an accident that totals your vehicle but only have liability coverage, you’re going to have to buy a new car without any help from your insurance company. When you have a full coverage policy, though, your provider will cover some of the costs and potentially even replace your car with a new one.
Clearly, getting only the minimum insurance leaves you at risk for some very unpleasant financial surprises. Because of these huge risks, we recommend that motorists take out full coverage auto policies to insure them against sudden large expenses.
Top Providers Of Full Coverage Car Insurance
We looked at some of the best car insurance providers and while there were many to choose from, these two providers should be at the top of your list.
State Farm: Best For Students
State Farm is the leading provider in the U.S. with high levels of customer satisfaction, a strong financial strength rating, and reasonable rates to back up its long-standing reputation.
|Reputation And Financial Strength||AM Best gives State Farm an A++ financial strength rating, which is the highest available. This indicates that the company has enough funds to fulfill claims without putting itself under financial duress and is more likely to fulfill the claims you submit. State Farm also has an A+ rating from the Better Business Bureau (BBB).|
|Pricing And Coverage Options||State Farm’s premiums are fairly low on average. In addition to standard coverage options, State Farm offers plans for classic cars and sports cars. We were particularly impressed with its travel and rental coverage, which reimburses you for not only the cost of a rental car if your regular is undrivable for more than 24 hours but also the cost of lodging and food if you’re 50 miles or more from home.|
|Discount And Reward Programs||Along with their already reasonable rates, State Farm offers a number of enticing discount programs, such as Steer Clear, which offers discounts to drivers under 25 who complete a driving safety course from State Farm and have been accident-free for the last three years.|
|Customer Satisfaction||Customers tend to be satisfied with State Farm compared to other providers due to its large network of insurance agents, easy online policy management, and the higher likelihood of getting claims filled.|
Although we highly recommend State Farm, we are a bit disappointed that it doesn't have any at-fault accident forgiveness policies, which are fairly common among the provider’s competitors.
However, this is a fairly small oversight in the face of the overwhelmingly outstanding coverage that State Farm provides.
Read more in our State Farm insurance review.
Geico: Best Overall
Geico is a big name in the insurance industry and is a great choice for its large network of local agents, reasonable rates, and easy online quotes and claim filing process.
|Reputation And Financial Strength||Geico holds the highest possible financial strength rating, A++, from AM Best. This means that Geico is financially capable of reliably fulfilling claims. It has an A+ rating from BBB and is generally considered a highly reputable company.|
|Pricing And Coverage Options||Geico’s premiums are slightly more expensive than State Farm’s on average |
but still significantly cheaper than most other competitors'. Geico offers the six standard coverage options and additional options like rental car reimbursement.
|Discount And Reward Programs||Geico provides several discount programs that customers can take advantage of. These include discounts for seniors, federal employees, emergency deployment, military members, students, good drivers who are accident-free for five consecutive years, and more. Multi-vehicle discounts and multi-policy discounts are also available.|
|Customer Satisfaction||Geico is known for its convenience. Its easy online filing and quoting procedures make dealing with Geico a breeze, and local agents are available if you’d like to meet with a representative face to face. Geico's mobile app is highly rated, with a 4.7-star rating on Google Play. The insurer also received an above-average score in the most recent J.D. Power 2021 U.S. Auto Claims Satisfaction StudySM.|
Geico is a reputable insurance company that will provide most customers with an easy and convenient insurance experience.
Read more in our Geico review.
In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of auto insurance providers to formulate rankings of the best insurers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.
- Industry Standing: Insurers with strong financial ratings and customer-first business practices receive the highest scores in this category.
- Availability: We consider availability by state as well as exclusions for specific groups of drivers.
- Coverage: This rating is based on types of insurance available, maximum coverage limits, and add-on policies.
- Cost and Discounts: Our research team reviews auto insurance rate estimates generated by Quadrant Information Services for a variety of drivers in every state. Companies with lower prices and many car insurance discount opportunities receive the best scores.
- Customer Service: We comb through customer reviews and consumer feedback studies from experts like J.D. Power.
- Technology: Auto insurers with mobile apps, advanced online services and telematics are more likely to meet consumer needs.
Read our other insurance articles:
- Cheap Insurance, No Deposit
- Liability Auto Insurance
- How Much Is Auto Insurance?
- Car Insurance Deductible
- Does Car Insurance Cover Theft?
- Do You Need Insurance To Drive?
- Can You Cancel An Insurance Claim?
- What Age Does Car Insurance Go Down?
- No Insurance On Financed Car
- Do You Need Insurance With A Learner’s Permit?