Full-coverage car insurance helps cover your own costs if your car is damaged. This differs from liability coverage, also known as minimum car insurance, which only covers damage you do to others. Be aware that full coverage isn't an actual type of auto insurance policy. Rather, it's a term for a policy that includes additional types of coverage beyond minimum car insurance, usually collision and comprehensive coverages.
Collision insurance covers damages to your car after a crash. Comprehensive insurance takes care of damages to your car caused by events other than collision, such as snow or a tree branch falling on your car.
According to our research, the average cost of full-coverage car insurance is $1,255 per year. Various factors may affect this price, including personal ones such as where you live and from whom you buy your auto insurance. Whether or not you need full-coverage car insurance depends on factors such as whether or not you financed your car and how old your car is. This article will cover:
- What is full-coverage auto insurance?
- The difference between liability and full coverage
- How much full-coverage car insurance costs
- Do you need full-coverage auto insurance?
What is full-coverage auto insurance?
Full-coverage car insurance refers to a combination of different types of coverage. A full-coverage car insurance policy typically includes liability, collision and comprehensive coverages. Collision and comprehensive insurance both cover damages to your own car due to covered perils.
Collision auto insurance
Collision car insurance takes care of repairs to or replacement of your car in the event of a crash for which you're responsible. Collision auto insurance usually covers:
- Hitting another car.
- Crashing into a fence, tree or building.
- Damages due to your car rolling over.
Comprehensive auto insurance
Comprehensive car insurance provides coverage for incidents that do not involve driving. These events include:
- Theft or vandalism.
- Natural disasters such as earthquakes or floods.
- Falling objects such as snow and ice.
Minimum car insurance vs. full coverage
Minimum coverage and full coverage have some key differences you should be aware of. Namely, minimum coverage, also known as liability, only covers damages you cause to other people, while full coverage also help cover your own damages.
Here are the most important things to know about liability, collision and comprehensive coverages:
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How much does full coverage cost?
The average cost of car insurance with full-coverage is $1,255 a year.
Your rates may be affected by various factors such as:
- The value of your car.
- Extreme weather history in your area.
- Crime trends in your neighborhood.
- Your driving and insurance claims histories.
To find your cheap full-coverage auto insurance, make sure to compare quotes from multiple providers. Given the high price of full coverage, you'll want to find the best combination of price and coverage.
See how much a full coverage car insurance policy will cost you.
Do I need full-coverage auto insurance?
As mentioned earlier, lenders will require you to have full-coverage insurance as part of the lending arrangement if you're buying or leasing a car through them. Otherwise, here are some personal factors to consider:
- If your car is new: If you have a brand-new car, you'll want to get full coverage. Unless you have enough money in the bank and are fine with spending it on a new car after a major accident, full-coverage auto insurance is practically a necessity.
- If you have an older car: Keep in mind that your collision and comprehensive insurance limits are based on the current value of your car, not what you paid for it. If the damages are more than the value of your car, it may be considered totaled. If you crunch the numbers and find that keeping it isn't cost-effective, you may want to consider canceling your full coverage.
- Still paying off a financed car: If you're financing a car and you still owe money on it, you'll likely be required to maintain full coverage. You may also want to get gap insurance. Gap insurance covers the difference between what your car is currently worth and what you still owe on it.
- Regional trends: If you live in an area with a history of extreme weather or high crime trends, full coverage is often a good buy. Your minimum liability insurance only pays for damage or injury you do to others, which leaves you high and dry if a tree falls on your car or if it's stolen.
- If it's too expensive: If full coverage simply isn't in your budget, then it may not be realistic. Even in this case, look into getting either a collision or comprehensive insurance policy to get the optimal coverage your budget can withstand.
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