What is full coverage auto insurance?

You've likely heard the phrase "full coverage" when discussing car insurance. It sounds reassuring, like a safety net that covers every possible scenario. But if you've ever tried to figure out exactly what full coverage auto insurance means, you might have found yourself more confused than confident.

Why the term “full coverage” can be confusing

"Full coverage” isn’t an official type of policy; it's a common way to describe a collection of coverages that can help protect you and your vehicle in various situations. Understanding what is and isn't included in “full coverage” insurance can help you make choices that fit your needs, lifestyle and budget. Let's clear up the confusion and help you feel more prepared for the road ahead. Even with the common components of full coverage car insurance, you might not be protected in situations such as:

• Medical payments for you or your passengers after an accident (unless you have Med Pay or personal injury protection).
• Rental car costs while your vehicle is being repaired after a covered claim (unless you add car rental reimbursement coverage).
• Damage caused by uninsured or underinsured drivers (uninsured/underinsured motorist coverage can fill this gap).
• The difference between your car loan amount and its value if your vehicle is totaled (gap coverage, which is usually offered by your auto loan provider rather than an insurance company, might help bridge this difference).

What does full coverage consist of?

When people refer to “full coverage” car insurance, they often mean a combination of three main coverage types:

• Liability insurance
  • What it covers — typically includes two components—bodily injury (BI) liability and property damage (PD) liability. Bodily injury coverage usually helps pay for medical expenses, lost wages or funeral costs for others injured in an accident you’re responsible for, while property damage coverage typically helps pay for the repairs to other people’s vehicles or property.
  • What it doesn't cover — your own car’s repairs or your medical expenses.
  • Requirement — legally required in most states, but the specific requirements vary. Some states mandate both bodily injury and property damage coverage, while others may require only one. Minimum coverage limits are set by state law.
• Collision coverage
  • What it covers — damage to your own car resulting from your vehicle overturning or an accident with another vehicle or object. Coverage applies regardless of who is at fault.
  • What it involves — you pay a deductible (a set amount) before your insurer begins covering costs. For example, if repairs cost $2,000 and your deductible is $500, you are responsible for the first $500 and your insurance covers the rest.
  • Requirement — typically required by lenders if you finance or lease your car.
• Comprehensive coverage
  • What it covers — protects your car from non-collision events like theft, vandalism, natural disasters, fire, floods or hitting an animal.
  • What it involves — a deductible may apply.
  • Requirement — typically required by lenders for financed or leased cars.
  • Your vehicle — is it old or new? Paid off or leased? If your car is older and its market value is low, it might not make sense to pay for collision and comprehensive coverage. However, these coverages can be beneficial for newer vehicles and may be required if your car is financed or leased.
  • Your budget — how much fits your budget for premiums? How much could you comfortably pay for a deductible per claim? A higher deductible can lower your monthly premiums but may result in higher out-of-pocket costs if you need to file a claim. Evaluate whether you can afford these costs or if you might choose not to repair your vehicle in the event of a loss.
  • Legal requirements — you must meet your state’s minimum liability coverage requirements. Consider how much coverage you need as that amount may be more than the minimum limits required by your state. Adding uninsured/underinsured motorist coverage is often recommended.
  • Your driving habits — if you rely heavily on your car, you may want to consider additional coverages like rental reimbursement or emergency road services.

Beyond full coverage basics: Other optional coverages

While the "full coverage combo" provides good foundational protection, other optional coverages can enhance your policy. Below is a breakdown of some other coverages:

Optional Coverage	Purpose
Unisured/underinsured motorist	Required in some states. Protects you if you’re hit by a driver who does not have insurance or does not carry sufficient coverage.
Med Pay/Personal Injury Protection	Covers medical expenses for you and passengers, regardless of fault.
Car rental reimbursement	Covers rental costs while your car is being repaired after a covered loss.
Emergency road service	Provides roadside assistance, including towing or flat tire changes.
Gap coverage	Covers the difference between your car’s value and what you owe on your loan if its totaled. This coverage is usually offered through your auto loan provider and not necessarily your insurance company.

Always check your state's legal requirements for mandatory minimums.

Is “full coverage” worth it?

Whether “full coverage” car insurance is worth it depends on your circumstances. Consider these factors:

Tailoring your policy to fit your lifestyle can help ensure you get adequate protection without overspending.

Whether you’re a new driver or someone reevaluating their coverage, knowing the details about your insurance coverage can help you better evaluate your options.

You can get an auto insurance quote now, or give us a few details and a State Farm® agent will reach out to you.