- Full coverage insurance explained
- Do I need full coverage car insurance?
- What's the difference between full coverage car insurance and liability coverage?
- How much is full coverage car insurance?
- Auto coverages offered by most insurance companies, depending on your state
- How does carrying full coverage impact my car insurance rates?
- FAQs
Full coverage car insurance is a term used to describe a combination of collision and comprehensive insurance, providing extensive protection for you and your vehicle. Although not an actual type of insurance, it can provide coverage for damages from accidents, theft, vandalism, and natural disasters.
This coverage offers peace of mind beyond basic liability insurance, which only addresses damage to others’ property or injuries when you are at fault in an accident.
Let’s take a closer look at what full coverage car insurance is and how it works.
Full coverage insurance explained
Full coverage car insurance is simply a term people use to describe a policy with a combination of coverages that help protect your car. It’s important to understand that it doesn’t mean you’re covered for everything, nor does it guarantee your claim will be approved. Full coverage car insurance combines various coverage options and endorsements to fully cover you up to any applicable limits you selected. It’s a single policy you build with your insurance company to provide the best combination of coverage for you.
When people say ‘full coverage’ they usually mean that you have the following coverage on your car insurance policy:
- Liability coverage
- Comprehensive coverage
- Collision coverage
While the above coverages are the big three that usually make up full coverage car insurance, there are some other useful coverages offered by most insurers, that can also be included under full coverage car insurance. These coverages include:
- Uninsured/underinsured motorist coverage
- Personal injury protection (PIP)
- Medical payments coverage (MedPay)
- Roadside assistance
- Rental reimbursement coverage
A Lemonade Car policy allows you to adjust your car insurance coverage limits and deductibles (when applicable) for each of these coverages. It also includes several additional coverages you can include to make sure you, your passengers, and your cars are protected—things like roadside assistance, temporary transportation coverage, and extended glass coverage.
Below, we’ll take a closer look at some of the coverages that would be included under the hood of a full coverage car insurance policy. (Or you can skip ahead here.)
Do I need full coverage car insurance?
Whether you need full coverage car insurance depends largely on your personal circumstances and financial situation. If you have a leased or financed vehicle, your lender will typically require you to carry both collision and comprehensive coverage.
If you own your car outright and it’s older or has a lower market value, you might decide that full coverage isn’t necessary and could opt for basic liability coverage to save on premiums.
Additionally, consider your financial ability to repair or replace your vehicle out of pocket. Weigh the cost of premiums against the potential benefits and decide what level of coverage best suits your needs and budget.
What’s the difference between full coverage car insurance and liability coverage?
The key difference between full coverage car insurance and liability coverage lies in the extent of protection they offer. Liability coverage is the most basic form of car insurance, required by law in most states, and it covers damages and injuries you cause to others in an accident where you’re at fault. It does not cover any damage to your own vehicle or medical expenses for injuries you sustain.
In contrast, full coverage car insurance includes both collision and comprehensive coverage in addition to liability coverage. Collision insurance pays for damages to your vehicle resulting from accidents with other cars or objects, while comprehensive coverage protects against non-collision-related incidents like theft, vandalism, and natural disasters.
Essentially, full coverage provides a broader range of financial protection, ensuring that both your vehicle and third parties are covered in various scenarios.
How much is full coverage car insurance?
The cost of full coverage car insurance can vary widely based on several factors, including your age, driving record, location, type of vehicle, and the specific insurance provider. On average, full coverage can be significantly more expensive than basic liability insurance due to the added protection it offers, such as collision and comprehensive coverage. Nationally, the average annual premium for full coverage car insurance typically is $2,278, but this figure can be higher or lower depending on your personal circumstances.
When looking for full coverage car insurance, it’s important to shop around and compare quotes from multiple insurers to find the best rate for full coverage. Additionally, you can often lower your premiums by choosing higher deductibles, maintaining a clean driving record, and taking advantage of discounts such as bundling insurance policies.
Auto coverages offered by most insurance companies, depending on your state
| Coverage type | What does it cover? |
|---|---|
| Liability coverage | To pay for damages and injuries to others if you are at fault in an accident. It does not cover your own vehicle or personal injuries. |
| Collision coverage | To repair or replace your own car if it’s damaged in an accident with another vehicle, or a stationary object (like a fence, highway divider, and so on). |
| Comprehensive coverage | To fix damage to your car, or possibly replace it entirely, if there are damages or losses from an incident that didn’t involve a collision with another vehicle (like if you hit a deer, damage from a hailstorm, and so on). |
| Roadside assistance | Provides help for common roadside issues such as flat tires, dead batteries, or towing needs. It ensures you’re not stranded due to minor vehicle problems. |
| Medical payments coverage (aka MedPay) | Medical expenses for you or a passenger in your car after a crash— like ambulance fees, hospital visits, and health insurance co-pays, or for funeral services (in a worst case scenario). Usually doesn’t have a deductible. |
| Personal Injury Protection (PIP) | To cover medical expenses and lost wages for you and your passengers, regardless of who is at fault in an accident. It may also cover additional costs like childcare or lost wages. |
| Uninsured motorist coverage/underinsured motorist bodily injury coverage | Medical bills and lost wages related to injuries caused by an uninsured or underinsured driver. |
| Uninsured motorist property damage coverage | To repair or replace your own car if you get into a car accident with an uninsured or underinsured driver. |
| Temporary transportation coverage | Transportation expenses like rideshares, public transportation, bike sharing, or a rental car for up to 30 days while your car is being repaired or appraised. |
| Extended glass coverage | To replace your windshield, your sunroof, or your back glass if it’s damaged. |
How does carrying full coverage impact my car insurance rates?
When you’re getting auto insurance quotes, you’ll want to find the right balance between premiums, deductible, and coverage options. Full coverage auto insurance will cost more because the insurer is providing more coverage to you. But if you’re in a costly accident, you could end up saving more money in the long run.
When you purchase certain coverages—like collision, comprehensive, and uninsured/underinsured motorist coverage—you may need to select a deductible. A deductible is the amount of a claim you are responsible for before your insurance policy starts paying out. If you pick a higher deductible, you’ll pay a lower amount for your full coverage car insurance policy, since you’d be responsible for more out-of-pocket expenses in the event of a claim.
FAQs
Is full coverage car insurance worth it?
Whether full coverage is worth it for you will depend on your individual circumstances, including the value of your vehicle and your financial situation. If you have a newer or financed car, or if you don’t have savings to cover major repairs or replacements, full coverage can provide valuable peace of mind. However, for older vehicles with lower market value, the cost of full coverage might outweigh the benefits.
Can I customize my full coverage car insurance policy?
Yes, you can customize your policy by adjusting coverage limits, like your deductible, and selecting additional coverages like roadside assistance or gap insurance to fit your needs. At Lemonade Car, you can adjust your own coverages, right through the app.
Will full coverage car insurance cover damage caused by natural disasters?
Yes, full coverage that includes comprehensive insurance will generally cover damages resulting from natural disasters like floods, earthquakes, hurricanes, and hailstorms. It also can cover other non-collision events, such as hitting a deer on the road and making sure that your vehicle is protected against a broad spectrum of risks.
Can I drop full coverage as my vehicle ages?
Yes, as your vehicle ages and its market value decreases, you might consider dropping full coverage to save on premiums. However, be sure to weigh the potential savings of full coverage car insurance against the risk of having to pay out-of-pocket for repairs or a replacement. However, it’s important to note that if you are leasing or financing your vehicle, your lender may require you to keep full coverage.
How often should I review my full coverage car insurance policy?
It’s a good practice to review your policy annually or whenever significant changes occur, such as buying a new car, moving, or experiencing changes in your driving habits. Regular reviews ensure your coverage remains appropriate for your current situation and can help identify savings opportunities.
What exactly does full coverage insurance cover?
Full coverage insurance typically includes liability insurance, which covers damages to others if you’re at fault in an accident, and comprehensive and collision coverage, which can help pay for damage to your own vehicle due to accidents, theft, vandalism, or natural disasters. It may also encompass additional protections like uninsured motorist coverage and personal injury protection (PIP). Full coverage will not provide coverage for regular maintenance, wear and tear, or your personal belongings kept in your car.
A few quick words, because we <3 our lawyers: This post is general in nature, and any statement in it doesn’t alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. You’re encouraged to discuss your specific circumstances with your own professional advisors. The purpose of this post is merely to provide you with info and insights you can use to make such discussions more productive! Naturally, all comments by, or references to, third parties represent their own views, and Lemonade assumes no responsibility for them. Coverage and discounts may not be available in all states.
