Full car insurance coverage isn't a single, standard policy. It's a common term for a combination of coverages that provide more extensive protection than your state's minimum requirements. Essentially, it bundles liability insurance (which covers damage you cause to others) with coverages that protect your own vehicle, primarily collision and comprehensive insurance.
- Collision Coverage pays for damage to your own car resulting from an accident with another vehicle or object, like a guardrail, regardless of who is at fault.
- Comprehensive Coverage handles damage to your car from non-collision events. This includes theft, vandalism, fire, falling objects, and weather-related incidents like hail or floods.
Most lenders require this full combination if you are leasing or financing your car. While it offers peace of mind, it's more expensive. The cost is influenced by your deductible—the amount you pay out-of-pocket before insurance kicks in. Choosing a higher deductible can lower your premium.
It's crucial to understand that "full coverage" doesn't mean every possible scenario is covered. It often excludes things like mechanical breakdowns or normal wear and tear. You can add optional protections like gap insurance (important for new cars), which covers the difference between what you owe on the loan and the car's actual cash value if it's totaled.
| Coverage Type | Typical State Minimum Requirement | Common "Full Coverage" Limit | What It Protects |
|---|
| Bodily Injury Liability | $25,000 per person / $50,000 per accident | $100,000/$300,000 | Others' medical expenses from an accident you cause |
| Property Damage Liability | $10,000 - $25,000 | $50,000 - $100,000 | Damage you cause to someone else's property |
| Collision | Not Required | Your car's actual cash value (minus deductible) | Damage to your car from a collision |
| Comprehensive | Not Required | Your car's actual cash value (minus deductible) | Theft, vandalism, fire, natural disasters |
| Uninsured Motorist | Required in some states | Matches your liability limits | Your expenses if hit by an uninsured driver |
