One of the smartest financial habits is knowing exactly what you’re paying for. Take car insurance: do you really know what “full coverage” includes? In most cases, it’s a bundle of liability, collision, and comprehensive. That means protection for damage you cause to others and for your own car after a crash, theft, vandalism, or certain weather events. It’s not “everything,” but it’s broader than liability-only.
Quick Takeaways
- “Full coverage” usually includes liability, collision, and comprehensive coverage.
- It covers damage you cause, your own car, theft, vandalism, and weather events.
- It does not cover routine maintenance, wear-and-tear, or uninsured drivers unless added.
- Deductibles and limits significantly affect cost.
- Liability-only may be enough for older vehicles without loans.
What does “full coverage” REALLY mean?
The term “full coverage” is misleading—there’s no universal policy with that name. Instead, insurers use it as shorthand for a package that includes:
- Liability coverage (injuries and damage you cause others).
- Collision coverage (damage to your car after a crash).
- Comprehensive coverage (non-collision events like theft, fire, or storms).
So when people ask, what does full coverage car insurance cover, they’re usually asking what protections this bundle provides compared to liability-only insurance.
Why the choice matters
Choosing the right coverage can prevent financial disaster. Liability-only might keep you legal, but it won’t pay to repair your own car after an accident. Full coverage costs more, but it provides peace of mind, especially for financed cars or vehicles worth more than you can afford to replace.
The trade-off? Cost. On average, full coverage car insurance can range from $1,500 to $2,500 per year, while liability-only plans might fall between $600 and $900. These numbers are rough estimates—actual premiums vary widely depending on your state, driving history, vehicle, and coverage limits. It’s not a fixed rule, but it helps illustrate the broader protection (and higher price tag) that full coverage usually brings.
Liability-only can be the bare-minimum legal path—but if your car is damaged, you’re on the hook. Full coverage costs more, yet it’s often essential for financed/leased vehicles and for cars you can’t easily replace out-of-pocket.
With Finhabits you can compare policies from different carriers to make the best choice for you.
What full coverage includes vs excludes
Inclusions
| Included in Full Coverage | What It Pays For |
| Liability | Injuries/damages you cause to others |
| Collision | Repairs to your car after an accident |
| Comprehensive | Theft, vandalism, weather, falling objects |
| Medical Payments (optional) | Limited medical costs for you/passengers |
| Uninsured Motorist (optional) | Covers you if hit by uninsured driver |
Exclusions
| Not Typically Covered | Notes |
| Routine maintenance | Oil changes, tires, brakes |
| Wear-and-tear | Gradual damage over time |
| Rideshare use (unless added) | Requires separate coverage |
| Commercial/business use | Excluded unless declared |
| Personal property in the car | Often excluded unless you add riders |
Deductibles, limits, and how they change your price
A deductible is the amount you pay out-of-pocket before insurance applies. The higher the deductible, the lower your premium.
Example:
- Collision repair = $3,000
- Deductible = $500
- Insurance pays = $2,500
Limits define the maximum amount your insurer will pay. For example, liability coverage might be written as 100/300/50:
- $100,000 per person for injuries
- $300,000 total per accident
- $50,000 property damage
Choosing higher limits increases protection but raises cost.
Full coverage vs liability-only: when to choose which
| Scenario | Best Option | Why |
| New car with loan/lease | Full coverage | Lenders require it |
| Car worth >$5,000 | Full coverage | Protects investment |
| Older car paid off (<$3,000 value) | Liability-only | Premiums may exceed car’s worth |
| High-risk driver with SR-22 | State minimum (liability) | To regain compliance affordably |
Rule of thumb: If the annual full coverage premium is more than 10–15% of your car’s market value, liability-only may make more financial sense.
Let’s say your car is worth $4000. If you are paying over $400 annually for collision insurance, that expense outweighs the coverage benefits. You might be investing too much into protecting something that’s not worth the financial burden.
Besides, those high premiums could be redirected to a savings account for future repairs or even a replacement car. It’s a simple way to manage your budget more effectively. At the same time, you are reducing unnecessary insurance costs.
FAQs
What is considered full coverage insurance?
Full coverage is not a single policy. It’s a combination of liability, collision, and comprehensive coverage, often with optional add-ons like uninsured motorist or medical payments.
What does full coverage insurance cover that liability-only doesn’t?
It covers your own car’s repairs after accidents, theft, or disasters. Liability-only only pays for damages you cause to others.
Does full coverage cover rental cars?
Sometimes. Your policy may extend coverage to rentals, but limits vary. Check with your insurer before renting.
Does full coverage cover windshield damage?
Yes, having comprehensive auto insurance typically covers glass damage, and in some states, you can get a $0 deductible for windshield repair or replacement, meaning you pay nothing out-of-pocket. These “zero-deductible states” are Florida, Kentucky, and South Carolina, where insurers are legally required to waive the deductible for windshield claims. Other states may allow you to purchase a separate glass coverage endorsement with a $0 deductible as an add-on.
Is full coverage worth it?
It depends on your car’s value, financial cushion, and risk tolerance. For new or financed cars, it’s usually necessary. For older cars, liability-only may suffice.
Does full coverage cover hit-and-runs?
Yes, if your policy includes uninsured motorist coverage, which treats a hit-and-run like being struck by an uninsured driver.
Glossary
- Liability insurance: Pays for injuries or property damage you cause.
- Collision coverage: Repairs/replaces your car after a crash.
- Comprehensive coverage: Non-crash events (theft, fire, weather, vandalism).
- Deductible: Out-of-pocket cost before insurance kicks in.
- Policy limits: The maximum your insurer will pay.
- Uninsured motorist coverage: Protects you if hit by uninsured/underinsured drivers.
- Medical payments (MedPay): Covers medical bills for you/passengers.
- Gap insurance: Covers difference between loan balance and car’s value if totaled.
- Full coverage :A commonly used term that refers to a combination of several types of auto insurance rather than a specific coverage itself. It typically includes: Liability insurance (for damage you cause to others), Collision coverage (for damage to your own car in a crash), and comprehensive coverage (for non-collision events like theft, fire, or weather)
Full coverage doesn’t mean everything, but it provides broader protection than liability-only. Whether it’s right for you depends on your car’s value, loan status, and budget.
Sources
- MarketWatch: Average Cost of Car Insurance in 2025
- NerdWallet: How Much Is Car Insurance in 2025?
- AutoInsurance.com: The Average Cost of Car Insurance in the U.S.
- Insurify: Car Insurance Trends & Average Premiums in 2025
- U.S. News & World Report: Why Are Car Insurance Rates Going Up?
- National Association of Insurance Commissioners (NAIC). Auto Insurance Database Report. https://www.naic.org
- Insurance Information Institute (III). Understanding Auto Insurance.
- U.S. Department of Transportation – NHTSA. Auto Insurance Basics
- Yahoo! Finance: Minimum Car Insurance Requirements in All 50 States
Disclaimer
This article is for informational purposes only and does not constitute legal or financial advice. Always consult your state DMV or a licensed insurance professional before making coverage decisions.
