If you’ve ever shopped for car insurance, you’ve likely come across the term “full coverage.” It sounds reassuring—after all, who wouldn’t want complete protection? But here’s the truth: “full coverage” isn’t an official insurance term, and it doesn’t mean you’re covered for everything under the sun. So what does it actually include? Let’s break it down.
What Is “Full Coverage” Auto Insurance?
In most cases, when insurers or agents say “full coverage,” they’re referring to a combination of several types of coverage that go beyond the state-required minimums. This typically includes:
- Liability Insurance
- Collision Coverage
- Comprehensive Coverage
These three components together offer a well-rounded protection package. Let’s take a closer look at each.
1. Liability Insurance: Required in Most States
This is the foundation of any auto insurance policy. It covers the costs if you’re responsible for an accident that injures someone else or damages their property. There are two parts:
- Bodily Injury Liability: Pays for medical expenses, lost wages, and legal fees if you injure someone.
- Property Damage Liability: Covers repairs to the other person’s vehicle or property.
Keep in mind that liability insurance doesn’t cover your own injuries or vehicle damage—only others involved in the accident.
2. Collision Coverage: Protection for Your Own Vehicle
Collision coverage pays for damage to your car if you’re in an accident, regardless of who’s at fault. Whether you hit another car, a pole, or a pothole, this coverage helps pay for repairs or the replacement value of your vehicle.
This is especially useful for newer or financed cars, where repair costs can be high.
3. Comprehensive Coverage: Beyond Collisions
Comprehensive coverage steps in for non-collision events, such as:
- Theft or vandalism
- Fire or flood damage
- Falling objects (like tree branches)
- Natural disasters
- Animal collisions
If your car is damaged or totaled by something other than a crash, comprehensive insurance helps cover it.
What Full Coverage Does Not Include
Despite its name, full coverage doesn’t mean you’re protected against everything. Here are a few things it typically doesn’t cover:
- Mechanical breakdowns (unless you have an extended warranty)
- Routine maintenance (like oil changes or brake pads)
- Rental car reimbursement (unless you add that separately)
- Gap insurance (unless added, it won’t cover the difference if your loan is higher than the car’s value)
Should You Have Full Coverage?
If you own a new or high-value vehicle, or if you’re financing or leasing your car, full coverage is often required by lenders. Even if it’s not required, many drivers opt for it for peace of mind.
However, if your car is older or not worth much, you might be better off dropping collision or comprehensive coverage to save money.
Final Thoughts
Full coverage auto insurance provides a solid shield against the most common risks on the road and off. But remember, it’s not a one-size-fits-all policy. Always review your coverage details and ask your insurer what’s really included. The key to smart auto insurance is knowing exactly what you’re paying for—and what you’re not.
