Full Coverage (Car Insurance)
Plain English
"Full coverage" isn't an actual type of car insurance policy. People usually use it to mean liability coverage plus collision and comprehensive, which pay to repair or replace your own car. It doesn't mean the policy pays for everything. Your policy's declarations page lists exactly which coverages and limits you have.
Read to the end to complete this term.
On this page
Definition
"Full coverage" is an informal term, not a type of auto policy. It usually means a policy with the liability coverage a state requires plus collision and comprehensive coverage, which pay for damage to the policyholder's own car. Lenders and lessors commonly require collision and comprehensive on financed or leased cars. What it includes beyond that varies by insurer and state.
Why It Matters
Asking for "full coverage" can leave you with state-minimum liability limits, no uninsured motorist coverage and no rental reimbursement. The Colorado Division of Insurance warns there's no such thing as a full coverage policy, so the useful question is which coverages, and how much of each.
Real-World Example
Imagine someone tells an insurer they want "full coverage" on a financed car. They get state-minimum liability, collision and comprehensive. After a crash that's their fault, collision pays to fix their car, minus the deductible, but the other driver's injuries exceed their low liability limit, and they have no rental car coverage while theirs is repaired.
Common Misconceptions
- Full coverage pays for everything. It's a nickname for a common set of coverages, each with its own limits, deductibles and exclusions.
- The law requires full coverage. States generally require liability coverage; collision and comprehensive are usually required by a lender or lessor, not by law.
- Full coverage includes high liability limits. It may come with only the state minimum unless you choose more.
Key Takeaways
- Colorado Division of Insurance: "Remember, there is no such thing as “full coverage.”"
- It usually means liability plus collision and comprehensive.
- Lenders and lessors commonly require collision and comprehensive.
- Check the liability limits, deductibles and optional coverages on your declarations page.
Frequently Asked Questions
What is full coverage car insurance?
An informal term, usually meaning liability plus collision and comprehensive coverage. It isn't a specific type of policy.
What's the difference between liability only and full coverage?
Liability only pays for damage and injuries you cause to others. "Full coverage" usually adds collision and comprehensive, which pay for your own car.
Is full coverage required?
States generally require liability coverage. Collision and comprehensive are usually required by a lender or leasing company for a financed or leased car.
Does full coverage include rental cars and roadside help?
Not necessarily. Rental reimbursement and towing are usually separate optional coverages. Check your declarations page.
When should I drop full coverage?
Once a car is paid off, some people drop collision and comprehensive if the car's value is low compared with the premium and deductible. Keep enough liability coverage either way.
Related Terms
Related Coverages
- Auto Insurance
Related Scenarios
Explore the rest of the Auto Insurance category.
Browse Auto Insurance terms →Sources
The factual claims on this page were checked against these sources. Rules and figures change, so check the source itself if you need to confirm the current version.
- doi.colorado.govBuyer's Guide to Auto Insurance · Colorado Division of Insurance
- iii.orgWhat is covered by a basic auto insurance policy? · Insurance Information Institute (Triple-I)
Educational information, not advice: This page is for general education only, not legal, financial, or insurance advice. Actual coverage, discounts, and requirements depend on your policy’s wording, your insurer, and the laws of your state. Confirm specifics with your own insurer or a licensed agent before making a decision. Insurpedia does not sell insurance and does not recommend specific insurers.