Cheap Full Coverage Car Insurance

Chances are you’ve heard about full coverage car insurance, but you might not be fully aware of what it actually covers or where you can find it. Here’s what you should know before deciding whether it’s right for you.

What is full coverage insurance?

Full coverage car insurance sounds great, but the term is a bit misleading. “Full coverage” generally refers to policies that include collision and comprehensive insurance — which actually cover very specific risks — in addition to liability insurance.

What does full coverage car insurance actually cover?

Many states mandate that drivers buy only a small amount of auto liability insurance. If you cause a crash, this coverage helps pay for the treatment of other people’s injuries and repairs to their property. But liability insurance won’t pay to repair your vehicle or cover incidents that don’t involve crashing into other vehicles or pedestrians. Collision and comprehensive insurance fill these gaps:

• Collision coverage pays for repairs to your car if you cause a crash with another vehicle or run into an object, such as a tree or a telephone pole.
• Comprehensive coverage pays to repair or replace your car if it’s stolen or damaged by a covered cause, such as an animal collision, weather, a falling object, fire or vandalism.

How much is full coverage car insurance?

Comprehensive and collision coverage give you much better insurance protection, but they also mean higher rates.

To get an idea of how much higher, NerdWallet sampled rates for liability-only policies and full coverage auto policies in three states: California, New Jersey and Ohio.

Here’s what we found:

» COMPARE: Car insurance quotes

The price of full coverage car insurance isn’t chump change:

• Adding it raises Ohio car insurance rates by $362 per year — and that was the most affordable state we tested.
• It raises New Jersey car insurance rates by $606.

But just one comprehensive or collision claim can make the cost worth it. Replacing a stolen car or repairing your vehicle after a crash could mean paying thousands of dollars out of your own pocket if you don’t have the right insurance.

States ranked for car insurance rates

We looked at rates across the country for drivers carrying full coverage plus uninsured and underinsured motorist insurance.

Where to buy full coverage car insurance

Full coverage is commonly available from any auto insurance company. We looked at average prices from the four largest car insurers for a policy that includes liability, collision, comprehensive, uninsured motorist bodily injury coverage and other state-required coverages where needed. State Farm was the cheapest option, on average.

Who needs full coverage car insurance?

If you finance your vehicle, your lender might require you to buy full coverage. Aside from that, comprehensive and collision are optional, although some insurers don’t let you add one without the other.

Comprehensive and collision coverage are particularly sound investments if:

• You have a new or expensive car.
• You regularly commute in heavy traffic.
• You live in a place with extreme weather, high car theft rates or a high risk of animal collisions.

However, the older your vehicle and the lower its value, the less benefit there is to having full coverage. Imagine it costs you $600 per year to add comprehensive and collision and you have a $1,000 deductible, which is the amount your insurer will subtract from a claim payment. If your car is worth only $2,000, the net value of a claim check would be $1,000 at most — so if you carry full coverage for more than a year, you won’t be able to get back more than what you paid. Checking your car’s current value at the National Automobile Dealers Association‘s website can help you decide whether full coverage makes sense.

Even with full coverage, there are other policy options you might need. For example, uninsured motorist protection, towing and labor service, and medical payments insurance all provide coverage that collision and comprehensive won’t.

How will various policy changes affect your rates? You can get insurance quotesusing NerdWallet’s tool and compare estimates to see for yourself.

To recap key questions and answers: