What Is Full Coverage Car Insurance, and Do You Need It?

Full coverage car insurance combines liability, collision, and comprehensive coverage to protect you and your vehicle in more situations than a state minimum policy. It’s not an actual insurance product or policy type — it’s industry shorthand for carrying these three core coverages together. 

Whether you need full coverage depends on your vehicle’s value, your financial situation, and whether your lender requires it.

Full coverage car insurance typically includes three essential coverages: liability, collision, and comprehensive. Together, they protect you if you cause an accident, damage to your vehicle, or experience losses from events like fire, theft, or weather.¹

It’s important to remember that “full coverage” is an industry term, not an actual insurance product you can buy.

Deductibles don’t apply to liability claims, but they do apply when you file a collision or comprehensive claim.

Full coverage doesn’t mean every possible loss is covered. Even with a full coverage policy, you’ll still have coverage gaps.

Full coverage generally doesn’t cover:

• Your medical bills. Although your bodily injury liability coverage will pay for medical expenses of the people you injure in an accident, it doesn’t cover your own medical bills. You’d need personal injury protection (PIP) or medical payments coverage (MedPay) to cover your medical costs.

• Vehicle upgrades or customization. Your policy won’t cover aftermarket parts or upgrades, like a new stereo system, custom wheels, or a paint job. Many insurers offer custom parts and equipment coverage (CPE) to help pay for those upgrades after a covered loss.

• Business use. A personal car insurance policy doesn’t cover using your vehicle for business purposes. But if you deliver goods or people, some insurers offer rideshare coverage or a separate policy. For other commercial use, ask about a commercial auto insurance policy.²

• Gap insurance. If your vehicle is a total loss and you owe more than it’s worth, you may have to pay the difference to your lender. But many insurers offer gap coverage to help cover the difference.³

• Roadside assistance. Most insurers offer optional roadside assistance coverage, which helps pay for towing, key lockout, fuel delivery, a jumpstart, or fixing a flat tire if you get stranded.

• Mechanical breakdown insurance. Auto insurance policies don’t cover mechanical breakdown or engine failures; that’s what a manufacturer’s warranty covers. But some insurers offer mechanical breakdown coverage that kicks in once your warranty expires.

• A rental car. Adding rental car reimbursement coverage to your policy helps pay for rental expenses while your vehicle is in the shop for covered repairs. 

Full coverage costs about $187 per month on average, compared with $65 per month for state minimum coverage. Your actual rate depends on factors like your:⁴

• Age

• Driving record

• Credit history (where permitted)

• Vehicle type and usage

• Coverage choices and deductibles

• ZIP code 

• Insurance company 

Cheapest full coverage car insurance by carrier

Rates can vary widely by carrier, even for the same driver and coverage levels. Insurance companies use their own rating formulas, which often weigh factors differently, resulting in different premiums.

The table below shows which companies offer some of the cheapest full coverage car insurance for different coverage limits.

Cheapest full coverage car insurance by state

Where you live can have as much impact on your premium as your driving record. Traffic density, weather risks, theft rates, repair costs, litigation, and state insurance regulations all play a role in what insurers charge, so safer drivers don’t always pay less.⁵

Our research found that South Carolina, Mississippi, and Wyoming rank as the worst states for drivers, while the safest driving states overall are Massachusetts, Hawaii, Connecticut, Minnesota, and New Jersey.⁶

Check out the table below for average full coverage car insurance rates by state.

Liability coverage is required in all states except New Hampshire, but full coverage is not a requirement. However, if you finance or lease a vehicle, your lender will likely require you to carry comprehensive and collision coverage until you pay off the loan.⁷

Some states also require additional coverages, such as:

• Personal injury protection (PIP)

• Medical payments coverage (MedPay)

• Uninsured/underinsured motorist coverage

Even if full coverage isn’t legally required, it can help prevent you from having to pay thousands of dollars out of pocket after an accident or other covered loss that damages your vehicle or causes you injury. 

You may want to consider dropping full coverage once your vehicle is worth less than the cost of maintaining that coverage. The decision depends on your car’s value, your deductible, how much you’re paying for comprehensive and collision coverage, and whether you can afford to repair or replace the vehicle yourself. 

Keep in mind, your insurer will only pay up to the vehicle’s current value, minus your deductible, if it’s deemed a total loss. 

The Insurance Information Institute (III) recommends dropping comprehensive and/or collision coverage once your vehicle is worth less than 10 times the coverage premium.⁸ You can enter your vehicle information into Kelley Blue Book (KBB) or the National Automobile Dealers Association (NADA) guide to determine your car’s value.

For many drivers, yes — especially if their vehicle still has significant value. Full coverage protects your car after accidents, theft, hail, flooding, vandalism, and other costly events that liability insurance won’t cover.

Full coverage may be worth it if you:

• Drive a newer or high-value vehicle

• Finance or lease your car

• Couldn’t easily afford major repair bills or to replace your vehicle

• Live in an area with frequent severe weather, theft, vandalism, or heavy traffic

If your vehicle isn’t worth much and you could replace it without financial strain, liability-only coverage may make more sense. 

The biggest difference is that liability-only insurance protects other people. Full coverage also protects your vehicle. 

Here are some ways full coverage differs from liability-only coverage.

The easiest way to get cheap full coverage car insurance is to compare quotes from multiple insurers. When comparing quotes, make sure to compare the same coverage types, limits, and deductibles to get a true “apples-to-apples” comparison on price and coverage.

Other ways to save include:

• Raising your deductible if you can afford a larger out-of-pocket expense after a claim

• Bundling your auto and homeowners insurance with the same insurer

• Asking about discounts for things like safe driving, low mileage, good grades, military service, paperless billing, or paying your bill in full

• Reviewing your coverage annually to make sure you’re not paying for protection you no longer need

• Consider usage-based insurance if you drive fewer miles or regularly practice safe driving habits

• Comparing quotes at each renewal to ensure you’re getting the best deal

You don’t have to wait until your policy renews to compare full coverage quotes. Luva research shows that more than half of insured drivers shopping for car insurance have held continuous coverage for at least four years, often long enough to sit at a higher rate as prices shift.⁶ If you’ve been with your insurer for a while, now is a good time to see whether you could save by shopping around. 

Not sure where to start? Luva lets you compare rates from multiple companies side by side. If you’re unsure how much coverage you need, you can chat with Lu to explore coverage options before choosing a policy.