Content of the material
- Reasons to Drop Full Coverage
- What is the average cost of full coverage?
- Frequently asked questions
- What About Dropping Just One?
- Liability vs. full coverage insurance: cost
- Weighing the Deductible
- What coverages make up an auto insurance policy?
- Do I need full coverage on my car?
- Are you covered in every instance with full coverage auto insurance?
- When to drop comprehensive coverage
- What is liability insurance vs. full coverage?
- What is liability coverage?
- What is full-coverage insurance?
- Our recommendations for car insurance
- How much does full coverage auto insurance cost?
- Past driving record
- Have you had a lapse in your auto insurance?
- Age and gender
- Where you live
- What kind of vehicle do you drive?
- Full-coverage policy
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Reasons to Drop Full Coverage
You should think about dropping your full coverage insurance policy if:
- You drive a high-mileage car. Quote Wizard notes that the value of your car drops with the rising odometer reading, which means that older cars with lots of miles do not need the protection of full coverage.
- You struggle to fit the cost of auto insurance in your budget. Generally, you should try to balance affordable coverage with financial protection in case of a crash. Talk to your insurance agent about stepping down from full coverage to save money without dramatically increasing your risk level.
- Your car is worth less than the cost of your full-coverage policy. Coverage.com recommends checking the value of your vehicle against your monthly premiums when making this auto insurance decision.
- You have relatively high risk tolerance. You prefer to save a few dollars each month in exchange for the financial burden of paying for accident repairs yourself.
- You rarely drive. If you don’t put many miles on your car, you have a much lower risk of damaging your vehicle in an accident than someone who commutes daily.
What is the average cost of full coverage?
Insurance policies including full coverage will vary in annual cost by your age, driving record, location, vehicle age and vehicle type. There is no specific policy called a “full coverage insurance policy” because, as we described above, full coverage means different things.
For the purposes of this guide, we reviewed policy rates including liability, personal injury, uninsured/underinsured motorist, comprehensive and collision. The average annual premium for this type of full coverage policy is $1,555.
Frequently asked questions
It could be. Remember that you’ll likely have to carry a full coverage policy if you have a loan or a lease. Even if you own your vehicle, full coverage can be a good option. If you would be financially strained by paying for your vehicle’s damage out of pocket after an at-fault accident, or even replacing your vehicle solely out of pocket, full coverage may be a good idea, even though it costs more to purchase.
Generally, the more coverage you purchase, the more you’ll pay. Higher auto liability limits, for example, will usually result in a higher premium because you’re getting more financial protection. The same logic applies when you add on full coverage and any optional endorsements. However, your car insurance deductible works a bit differently. Your deductible is the amount you are willing to pay if you file a claim for vehicle damage. Full coverage policies have a deductible for both comprehensive and collision. Higher deductibles generally mean lower premiums since you’re willing to pay more out of pocket, which means the insurance company will pay less. Since you’ll save the company money in the event of a claim, you’ll probably get a lower premium.
What About Dropping Just One?
So, given the cost of collision and comprehensive coverage, and the potential payouts, does it make sense at some point to keep one coverage and drop the other, and can you do this?
The answers: Yes and yes. While insurers generally sell them together, and drivers of older cars often drop them at the same time, Poe and Worters both say that comprehensive insurance is a better value for the money than collision coverage.
Liability vs. full coverage insurance: cost
The cost of your insurance policy is determined by a number of factors, including your age, vehicle, driving record, state, and city. Because a full coverage policy includes liability insurance, it is cheaper to purchase only liability vs. full coverage. And adding comprehensive and collision policies to your liability policy can be relatively inexpensive.
The chart below shows average policy costs for liability vs. full coverage insurance by state. The data comes from a 2020 report issued by the National Association of Insurance Commissioners (NAIC). This report reflects consumer cost data from 2017.
Weighing the Deductible
Car owners also need to weigh, in advance, the potential insurance payout of any collision or comprehensive claim. Both of these coverage types have deductibles, which reduce the amount of any insurance claims check. Deductible amounts can be in the thousands of dollars, if that’s what you picked when you bought the policy. A $2,000 deductible on a total loss car valued at $5,000 is only $3,000.
You can choose a much lower deductible, such as $250, or even possibly $0, but you’ll pay more in premiums.
“The biggest misnomer is ‘just have the lowest deductible,’” says Poe, “because the lower the deductible, the more you’re increasing the risk to the insurer that you’ll file a claim.”
Poe compares this to health insurance. The lower the deductible—the amount the policyholder pays for a doctor’s visit—the more times you’ll see the doctor. And it’s true for auto insurance as well. By having a low deductible, the car owner is more likely to file claims with the insurer for a couple of parking lot dents that they could fix at their own expense or simply ignore.
“Having a high deductible may ultimately save you money,” Poe says. “If you do submit a claim and your insurer’s cost exceeds $1,000, you may be charged more for the next three years.”
What coverages make up an auto insurance policy?
Auto insurance policies have state-required coverages which include limits you’re legally required to have. Then there are optional coverages and coverage limits. The coverages and limits of coverage vary by state. Want to know more about your state? Check out the state information pages.
Do I need full coverage on my car?
It really depends on your car and your risk tolerance.
For example, say that you pretty much always park your car in the garage overnight where it’s protected from thieves and falling tree limbs. You might not need comprehensive coverage in this case. But keep in mind that without it, if someone nabs your car from the grocery story parking lot, you’re on the hook for replacing it.
Basically, the more your car is worth, the more you’re going to get out of your auto insurance policy. Which leads us to another question.
Are you covered in every instance with full coverage auto insurance?
The short answer is no. A good example is if you get into an accident with someone who’s uninsured and the accident is their fault. In this case, you often won’t get insurance coverage for property damage or medical bills.
It’s good to add uninsured motorist insurance to your policy for this very reason. It will protect you if the other driver’s insurance doesn’t cover all the expenses.
Sometimes your medical expenses (or those of your passengers) won’t get covered, either. This happens many times when the accident is your fault. But, many people choose to add this to their policy by paying extra.
There are other add-ons you may consider on top of your full coverage auto insurance. For example, most comprehensive coverage plans don’t include roadside assistance. This is a nice thing to have if you find your car often breaks down. But, you can usually add it for a small extra fee.
Gap insurance is also a standard add-on. It covers the difference between the market value of your car at the time of an accident and the amount you still owe.
When to drop comprehensive coverage
While comprehensive coverage is typically more affordable than collision coverage, there may be instances when it’s not worth carrying, including:
Your vehicle holds a low value: As with collision, consider dropping comprehensive coverage if your vehicle’s market value is lower than a few thousand dollars. Figure in your deductible as well and the potential insurance payout may not be worth the price of the coverage.
You’re covered on another policy: If your family member insures your vehicle on their policy and comprehensive is an included coverage, there’s no sense in paying for it twice. Note that your car can only be covered on a family member’s policy if it’s garaged at their residence.
What is liability insurance vs. full coverage?
Liability insurance will cover damage to other vehicles or injuries to other people when you’re driving. Full-coverage policies do include liability insurance but also additional protection to cover damage to your own vehicle.
In most states, you are required to have some level of car insurance, but these minimum coverage requirements are mostly limited to liability coverage. Full coverage — a shorthand name for policies that include comprehensive and collision insurance — is never required by state law, but your lender may require it if you lease or finance your car.
What is liability coverage?
Liability insurance is required by most states and covers the cost of damage and injuries to others you cause in an accident.
In other words, liability insurance does not cover damage to your own car or injury to yourself — only damage to others for which you’re legally liable. Liability coverage is split into two different components: bodily injury liability and property damage liability.
Bodily injury liability coverage will cover the cost of the other person’s injuries if you are at fault for the accident, up to the policy’s limits. Policy limits normally show two figures:
The maximum amount paid per person injured in an accident The maximum amount paid for the entire accident
Typically, the total amount is double the per-person limit. For example, a policy might limit coverage to $15,000 per person injured and $30,000 for all injured people.
Property damage liability coverage pays for damage to other vehicles — or property — when you are at fault. The policy limit for this type of coverage is listed as a single dollar amount, which represents the maximum payout per accident. However, this does not cover damage to your own vehicle.
If you live in a state that does not require car insurance, like New Hampshire or Virginia, you’re still financially responsible for injuries and property damage resulting from an accident. So, we recommend you buy some sort of coverage.
What is full-coverage insurance?
Full coverage doesn’t mean a policy has all the bells and whistles. This term refers to policies that include liability coverage along with collision and comprehensive insurance.
Collision insurance covers you in situations where you are driving and your vehicle is damaged by another vehicle or object, regardless of who is at fault. Collision coverage is usually not offered on its own and is purchased with comprehensive insurance.
Comprehensive insurance will pay for repairs in noncollision incidents, such as vandalism, theft and damage from weather, natural disasters, falling objects and animals.
Collision and comprehensive insurance will pay for damage to your car up to its actual cash value. Actual cash value is the amount your vehicle is worth after subtracting depreciation costs — such as wear and tear — from the original purchase price of the vehicle.
Full coverage is not legally required on a state level but is often required by your lender if you lease or finance your car. With comprehensive and collision insurance, you will be responsible for covering the cost of your deductible, which may range from $250 to $1,000.
Our recommendations for car insurance
Whatever your auto insurance needs, it’s a good idea to compare car insurance quotes from multiple providers before you purchase a policy. There is no single best insurer for every driver, so comparing liability vs. full coverage quotes from multiple options is the best way to find the lowest price.
How much does full coverage auto insurance cost?
There is no set price for full coverage auto insurance. There are many factors an insurance company considers when calculating your insurance premium. Here are the most important ones:
Past driving record
Insurance companies want to know if you have accidents and or tickets on your record. A history of severe issues like DUIs or many speeding tickets may force you into a much higher bracket.
Have you had a lapse in your auto insurance?
Usually, if you haven’t had car insurance in the last six months or longer, your initial rate will be higher.
Age and gender
While youth has many advantages, this is not one of them. You will usually pay more the younger you are.
Young guys get dinged harder than young women on this one – sorry guys.
Where you live
Your insurance rates can sometimes double if you move to a new area. An example is if you move to an area where theft and accidents are more prevalent than in other regions. Now there’s a factor you probably never thought of when shopping for a new place to live!
According to Forbes, people in Idaho, Maine, and Ohio pay 33 percent less than the national average. But Michigan residents pay 90 percent more than the national average.
Seem unfair? It might be, but there’s nothing you can do. Insurance companies look at factors like:
- The rate of insurance fraud in a state.
- How big the insurance claims are in a state.
- The automobile theft rate for a particular state.
What kind of vehicle do you drive?
Your insurance company will consider a few factors when looking at your car. Things like make, age, and the safety features of your car determine how much they’ll charge you.
But most auto insurance companies don’t charge more for trivial things. A typical example is the color of your car (red car owners don’t pay more than white car buyers for the same make and model).
According to insure.com, the Honda Odyssey LX is the least costly to insure. They say minivans usually have lower insurance because of their many safety features. The Mercedes S65 AMG is listed as the most expensive to insure. And five other Mercedes models fall in the top ten. Sports and luxury motor vehicles cost more to insure than the average vehicle.
Read more: The Cheapest Cars To Insure
Our sample driver was a 30-year-old man driving a 2015 Honda Civic EX with no available credit history. According to our data source, Quadrant Information Services, this sample driver is equivalent to a driver with fair to poor credit. All car insurance quotes were analyzed from all available ZIP codes within each state.
For our sample driver’s full-coverage policy, we gave him coverage limits slightly above any one state’s minimum requirements.
Coverage type Study limits Bodily injury liability$50,000 per person/$100,000 per accidentProperty damage liability$25,000 per accidentUninsured/underinsured motorist bodily injury$50,000 per person/$100,000 per accidentComprehensive and collision$500 deductiblePersonal injury protectionMinimum when required by state
Our car insurance rates for minimum-coverage policies show the average cost of a policy that meets any state’s minimum requirements for auto insurance coverage.
ValuePenguin’s analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes may be different.