What does “full coverage” on a car insurance policy mean?

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Joel Ohman
Founder, CFP®https://res.cloudinary.com/quotellc/image/upload/insurance-site-images/ciccom-live/41b5e36b-joel-ohman.jpg

UPDATED: Mar 4, 2020

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Here's what you need to know...

  • Full coverage insurance does not cover everything in full
  • Includes multiple different types of coverage, including injury, collision, and comprehensive car insurance
  • Medical insurance and personal injury protection are essential for car insurance
  • Underinsured motorist coverage is not usually substantial enough to cover all car accident losses

Full coverage on a car insurance policy typically includes comprehensive and collision insurance, in addition to liability coverage.

Full coverage is a misleading term because the insurance does not cover everything in full.

Full coverage refers to liability, collision, and comprehensive coverage, but every insurance company may have a different definition for it. It does not usually include additional policies, such as medical insurance or uninsured motorist coverage.

Even with liability, collision, and comprehensive, not everything is covered.

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Liability, Collision, & Comprehensive Insurance


Most car insurance companies consider liability, collision, and comprehensive to be full coverage for your car. However, this does not mean that every car part — internal and external — is covered in every claim. Even if you have full coverage, your car is not covered for mechanical failure or fraudulent claims.

Your policy may also have exclusions, such as if your installed car stereo is covered in a break-in, but your laptop may not be.

Liability insurance is insurance for the other party’s car. You only need to submit a liability insurance claim if you are at fault for causing damage to another person’s physical being or personal property. Liability covers damage to a victim’s car/property, and it covers bodily injury or death.

Liability insurance does not cover your medical needs or your own car’s damage. To have coverage for you, you need collision car insurance, which is part of what is referred to as full coverage.

Collision car insurance will cover damage to your car, whether your car was hit or if it hit someone else. Almost any impact is covered by collision, including a bicyclist running into your car. An exception to this coverage is if your vehicle collides with an animal, which is covered by comprehensive insurance.

Comprehensive car insurance covers the majority of non-collision type incidents, such as your car getting struck by lightning or a window getting smashed by vandals.

Since liability only covers the other person’s car, collision and comprehensive are needed to cover damage caused to your car. Thus, buying liability, collision, and comprehensive is often termed full coverage.

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Medical Insurance & Personal Injury Protection

Although medical insurance and personal injury protection are not usually considered part of the full coverage, some would say that they are essential for car insurance. Liability covers bodily injury for the people in the other car, but it does not provide you with any medical insurance if you should need it.

If you are at fault for an accident and you suffer from injury as a result of that accident, then you may need medical insurance to cover your medical bills. If you have health insurance and emergency room treatment, then you may not need additional medical coverage.

However, it is worth considering, especially if you don’t have any other means of paying medical bills.

Personal Injury Protection (PIP) is required in no-fault states. No-fault states mandate that everyone carries PIP so that everyone is responsible for their medical bills, thus reducing the amount of frivolous lawsuits that sometimes occur in states where the fault is determined, and blame is assessed.

PIP assures that everyone is responsible for his/her own medical insurance as related to car accidents.

Uninsured Motorist & Underinsured Motorist Coverage


Although liability insurance is required in every state, not everyone abides by the law. Some people drive without car insurance, leaving you at financial risk if they strike you. Uninsured motorist coverage gives you insurance for times when you may be in an accident with someone who is not currently insured.

Underinsured motorist coverage is similar to uninsured motorist coverage, with the exception that the underinsured motorist has some insurance. Underinsured motorist coverage refers to a person who has car insurance but only the bare minimum required by law.

While this insurance offers some liability coverage, it is not usually substantial enough to cover all losses that can occur in an accident. If you are hit by someone who has basic minimum liability and your car is totaled, you may still pay out of pocket for the difference.

There are many optional insurance policies that can be purchased to give you full coverage, but even so, not everything will be covered. To know what is included versus excluded on your policy, review it in fine detail, and ask your agent if you have any uncertainties.

Remember: If you have full coverage on your car insurance policy, then you probably have liability, collision, and comprehensive.

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