What Does Full Coverage Car Insurance Cover?

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Updated: June 8, 2026

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Key Takeaways
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Full coverage adds collision and comprehensive to your liability policy. Liability pays for damage you cause to others. Collision pays for damage to your own car after a crash. Comprehensive covers theft, hail, fire and animal damage.

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Lenders require full coverage on financed or leased vehicles. Once your car's paid off, you decide whether the cost is worth it.

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The 10% rule helps you decide when to drop coverage. If your annual collision and comprehensive premium exceeds 10% of your car's current value, switching to liability only may save you money.

What Does Full Coverage Car Insurance Cover?

Full coverage combines three separate coverages: liability, comprehensive, and collision. Each one pays for a different type of loss.

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    What Liability Coverage Pays For

    Liability pays for injuries and property damage you cause to other people in an at-fault crash. Bodily injury liability pays the other driver's medical bills and lost wages. Property damage liability pays for their car and any other property you damage, including fences and storefronts. Liability is required in 49 states (not required in New Hampshire and only property damage required in Florida) and is the foundation of any policy. Adding full coverage doesn't change your liability limits. Those are set separately when you choose 25/50, 50/100 or 100/300.

  2. 2
    What Collision Coverage Pays For

    Collision pays for damage to your own car after a crash, regardless of who caused it. If you rear-end another car, get hit by an uninsured driver or hit a fixed object, collision pays for your repairs minus your deductible. Common deductible options are $250, $500 and $1,000. In our analysis, most drivers choose a $500 deductible as the right balance between monthly cost and out-of-pocket exposure after a claim.

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    What Comprehensive Coverage Pays For

    Comprehensive pays for losses that aren't caused by a crash. That includes theft, hail damage, fire, flooding, fallen trees and animal damage. Collision and comprehensive are always sold together as the physical damage portion of a full coverage policy. Hail damage and theft are the two most common comprehensive claims we see in our data.

What Full Coverage Car Insurance Doesn’t Cover

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    Mechanical Breakdowns and Maintenance

    Engine failure, worn brakes and transmission problems aren't covered by any car insurance policy. A vehicle service contract or extended warranty covers those, not your insurer. 

    Some insurers offer Mechanical Breakdown Insurance (MBI) as a separate add-on, which does cover specific mechanical failures not caused by an accident.

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    Personal Belongings Inside the Vehicle

    A stolen laptop, a damaged phone or cash left in your car isn't covered by auto insurance. Personal property inside your vehicle falls under your renters or homeowners policy instead.

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    Custom Parts Not Listed on Your Policy

    Aftermarket wheels, upgraded audio and performance modifications are excluded unless you've added a custom parts endorsement. Standard policies cover factory-installed equipment only. Anything you added after purchase needs to be listed separately, often requiring a stated amount endorsement for proper valuation.

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    Rideshare and Commercial Use Gaps

    If you drive for Uber or Lyft, your personal auto policy doesn't cover the period when the app is on and you're waiting for a ride request. A rideshare endorsement or separate rideshare policy fills that gap.

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    Amounts Above Actual Cash Value (ACV)

    If your car is totaled, your insurer pays what the car was worth at the time of the loss, not what you paid or what a replacement costs today. New car replacement coverage is an add-on that bridges this gap for newer vehicles. Gap insurance (also known as loan/lease payoff coverage) is another add-on that can pay the difference between your car's actual cash value (ACV) and the remaining balance on your loan (if you owe more on your car loan or lease than the car is worth).

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    Other Common Personal Auto Policy (PAP) Exclusions

    Intentional injury or damage to a vehicle, use of a vehicle without permission, racing or driving under the influence are common personal auto policy (PAP) exclusions not covered by a full coverage policy.

How Much Does Full Coverage Car Insurance Cost?

Adding collision and comprehensive to a liability-only policy costs the average driver $67 to $86 more per month. In our analysis, most drivers who have full coverage choose 100/300/100 limits with a $1,000 deductible, which runs $133 per month. 

Rates below are for a 40-year-old driver with a clean record and good credit based on MoneyGeek's analysis of Quadrant Information Services data. Factors affecting full coverage cost include your age, driving record, credit score, vehicle type, location, chosen deductibles, and coverage limits. These elements significantly influence the premium rates presented in the table. For more detailed cost information, see our guide to the cheapest full coverage policies.

State Minimum Liability Only
$62/mo
$747/yr
State Min. + Full Cov. ($1,000 Ded.)
$74/mo
$888/yr
50/100/50 Full Cov. ($500 Ded.)
$129/mo
$1,551/yr
100/300/100 Full Cov. ($1,000 Ded.)
$133/mo
$1,597/yr
300/500/300 Full Cov. ($1,500 Ded.)
$148/mo
$1,775/yr

The difference between state minimum liability only and 100/300/100 full coverage is $71 per month. For most drivers with a car worth more than $10,000, that's worth it. For drivers with older, lower-value vehicles, state minimum liability plus collision and comprehensive at $74 per month is often the right place to start. Use our car insurance calculator to get a rate based on your specific vehicle and ZIP code.

Full Coverage Car Insurance Claim Example

Here's an example to show you the steps of a full coverage car insurance claim process. In this scenario, let's say you were driving on a rainy highway and your car hydroplaned into a guardrail, then slid into another vehicle. 

First, contact your insurer to report the accident and initiate the claim process steps. Your insurer will typically assign an adjuster role to assess the damages. 

On a full coverage policy with a $500 deductible, you pay the first $500 and your insurer pays the rest up to your car's actual cash value (ACV). In this example, your liability coverage would pay for damages you caused to the other driver's car ($8,000) and their medical bills ($12,000) because damages to others fall under your liability limits. Collision coverage kicks in to pay for the $6,500 in damages to your own car, minus your $500 deductible — so your insurer pays $6,000 and you pay $500. 

If the damages to your vehicle were extensive, the adjuster would also determine if it's a total loss calculation, meaning the repair cost exceeds a certain percentage of its actual cash value (ACV). After damage assessment and settlement negotiation, the claim payout timeline typically begins, with payment issuance following agreed terms.

Do You Need Full Coverage?

No state requires full coverage insurance; states only mandate minimum liability insurance (bodily injury and property damage). If you own your car, adding comprehensive and collision onto your chosen liability limits is optional but recommended by experts.

If you're financing or leasing your car, full coverage isn't optional. Your lender requires comprehensive and collision coverage to protect their collateral, and often includes specific liability limits. Dropping collision or comprehensive while you have an outstanding loan violates your financing agreement. Our guide on insuring a financed car covers what lenders require.

Some drivers also consider uninsured/underinsured motorist (UM/UIM) coverage or medical payments (MedPay) as part of their full coverage, but these are also optional in most states.

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HOW TO DECIDE IF FULL COVERAGE IS WORTH IT

Sometimes having full coverage car insurance doesn't make financial sense. If you own your car, use the 10% rule to determine whether full coverage is worth having.

The 10% Rule — Divide your annual collision and comprehensive premium by your car's current value (not what you initially paid for it). If the result is 10% or higher, dropping those coverages may save you money.

For example: Full coverage insurance costing $820 per year on a car worth $7,500 is 10.9% of its value, above the 10% threshold. With a $1,000 deductible on that $7,500 car, the most your insurer would pay after a total loss is $6,500. If you've got $6,500 in savings and can absorb that loss, dropping coverage to lower your premium makes sense. Without that cushion, keep the coverage even if the percentage is above 10%.

In our analysis, the 10% rule works well as a starting point but it's ultimately a decision about risk. Our when to drop full coverage guide breaks this down by vehicle value and deductible combination.

Is Full Coverage Car Insurance Right For You?

Full coverage pays for damages on both sides of a crash. Liability covers damage you cause to others, collision covers your own car after an accident, and comprehensive covers theft and weather damage. If you're financing or leasing a vehicle, full coverage is required. If you own your car, it's optional but recommended in most cases. Drivers with a car worth more than $10,000 should carry full coverage.

FAQ: Full Coverage Car Insurance

Our Methodology

MoneyGeek's rate data is sourced from Quadrant Information Services and reflects 2.4 million quotes across major U.S. insurers. Rates shown are for a 40-year-old driver with a clean record and good credit. Full coverage reflects 100/300/100 liability limits with a $1,000 deductible for comprehensive and collision. For a full explanation of how MoneyGeek collects and presents insurance data, see our auto insurance methodology.

About Mark Fitzpatrick

Mark Fitzpatrick, Licensed P&C Insurance Expert, MoneyGeek

Mark Fitzpatrick, a licensed Property and Casualty (P&C) Insurance Producer in Connecticut, is MoneyGeek's resident insurance expert. He has spent nearly a decade analyzing the market, first at LendingTree and now at MoneyGeek, where he produces original research on hundreds of carriers and millions of rates across auto, home, renters, health and life insurance.

He covers economics and insurance at MoneyGeek, and his work has been featured in The Washington Post, The New York Times and NPR, among other outlets.

Like all MoneyGeek analysts, he draws on independent cost and consumer experience data. No insurance company partnership influences his recommendations.

Mark holds a B.A. from Boston College and an M.A. in Economics and International Relations from Johns Hopkins University. He started his career in financial risk management at State Street and is also a five-time “Jeopardy!” champion.

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