“Full coverage” is insurance industry slang that sounds way more complete than it actually is. It’s basically a package deal combining liability insurance (which covers damage to others when you’re at fault) with collision coverage (for your car in accidents) and extensive coverage (for non-collision incidents like theft or hail). Despite the name, it doesn’t cover everything—there are plenty of gaps, exclusions, and scenarios left unprotected. Understanding what’s actually included makes the difference between false security and real protection.
Design Highlights
- Full coverage is informal terminology combining liability insurance, collision coverage, and comprehensive coverage into one policy package.
- Liability insurance protects others by covering bodily injury and property damage when you cause an accident.
- Collision coverage pays for your vehicle’s damage from accidents, regardless of who is at fault.
- Comprehensive coverage protects against non-collision damage like theft, vandalism, weather events, and windshield damage.
- Despite its name, full coverage has limitations and doesn’t cover everything without additional optional add-ons.
When most drivers hear “full coverage auto insurance,” they assume it means everything’s covered. Wrong. Full coverage is just industry slang for a policy that bundles liability insurance with collision and thorough coverage. It doesn’t actually cover everything, despite what the name suggests.
At its core, full coverage includes liability insurance—the stuff that protects other people when you mess up. This means bodily injury liability for medical expenses, lost wages, and funeral costs if you injure someone. It also includes property damage liability for repairs to other vehicles or property. Most states mandate this coverage with minimum limits. In Ohio, for example, drivers need at least 25/50/25 coverage. That’s $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 for property damage. Not exactly generous amounts when the average new car costs $47,000 these days. These minimum coverage levels are often inadequate for significant accidents.
Collision coverage handles damage to your vehicle from accidents with other vehicles or objects like fences and trees. Doesn’t matter whose fault it is. You’ll pay a deductible per claim, and lenders usually require this coverage if you’re financing or leasing your vehicle.
Same goes for thorough coverage, which protects against non-collision damage including theft, vandalism, fire, floods, hail, falling trees, and animal strikes. It typically covers windshield damage too. Both collision and thorough protect your vehicle up to its actual cash value.
Then there are the optional add-ons. Uninsured and underinsured motorist coverage protects you when someone without adequate insurance hits you. Some states require it. Medical payments coverage or personal injury protection covers medical expenses regardless of fault—because basic full coverage won’t cover your medical bills unless you add this. Towing coverage is another optional benefit that helps with roadside assistance costs.
Rental car reimbursement pays for a rental while your vehicle gets repaired. Gap insurance covers the difference between your loan amount and your vehicle’s value if it gets totaled.
Here’s the kicker: full coverage has limitations and exclusions. It won’t cover your medical expenses without additional coverage. It won’t pay for rental cars unless you specifically add that coverage. Deductibles reduce what you actually get paid out. You can customize your comprehensive coverage through options like replacement value versus actual cash value and policy limits. Specific exclusions vary by insurance company and policy details.
Lenders typically require full coverage for financed or leased vehicles. It’s also recommended for new vehicles given their substantial cost. Full coverage protects significant financial investments in vehicles, but calling it “full” is misleading at best.
Frequently Asked Questions
Does Full Coverage Auto Insurance Cover Rental Cars While Traveling?
Full coverage usually extends to rental cars, yeah. Liability, extensive, and collision typically transfer automatically—treating the rental like a substitute for the insured vehicle.
But here’s the catch: it only works in the U.S. and Canada. International trips? You’re out of luck. Coverage limits and deductibles still apply, so high deductibles might make rental counter insurance worth considering.
Also, rental reimbursement coverage doesn’t cover voluntary rentals while traveling. That’s a completely separate thing for repairs only.
Will Full Coverage Pay for Repairs if I Hit a Pothole?
Yes, full coverage will typically pay for pothole damage—but only through collision coverage, not all-encompassing.
The driver pays the deductible first (often $500 or $1,000), then insurance covers the rest. If repair costs are less than the deductible? Tough luck. The driver pays everything out-of-pocket.
All-encompassing won’t help here since potholes aren’t theft or hail damage.
And filing multiple pothole claims? That’s a great way to watch premiums skyrocket. Sometimes it’s smarter to just eat the cost.
Is Full Coverage Required for Leased or Financed Vehicles?
Yes, lenders and leasing companies almost always require full coverage—that means liability, collision, and extensive.
It protects their financial interest in the vehicle. Skip it, and they’ll slap forced-placed insurance on the loan, which costs way more and covers way less. They’ll want proof upfront, too.
The lease or loan contract spells out exactly what’s needed, sometimes demanding higher limits than state minimums.
Bottom line: financed or leased means full coverage isn’t optional.
Does Full Coverage Auto Insurance Protect Against Flood Damage?
Yes, full coverage auto insurance protects against flood damage—but only through the all-encompassing coverage component.
It covers water damage from rising rivers, storms, and heavy rainfall. However, there’s a catch. The driver still pays a deductible first, typically $100 to $1,000. Insurance covers the rest.
But forget about flooded personal items inside the car or damage from poor maintenance. Those aren’t covered.
And flood insurance policies? They don’t cover vehicles at all.
How Much Does Full Coverage Cost Compared to Liability Only?
Full coverage typically runs over $4,000 annually, while liability-only might cost just a few hundred to around a thousand bucks per year.
That’s a massive difference. The gap exists because full coverage includes extensive and collision protection for the policyholder’s vehicle, not just third-party damage.
Location, driving history, and vehicle type all factor in, but the core truth remains: full coverage costs substantially more—often several times the price of liability-only policies.
