Understanding auto insurance: Comprehensive, full coverage, and liability explained

Owning or leasing a car isn’t as simple as getting the keys and turning the ignition. Nearly all states in the U.S. require a car owner to take out an auto insurance policy before operating a vehicle. 

But insurance policies come in all shapes, sizes, and types. What level of insurance do you need to get behind the wheel? Read on to learn everything from what comprehensive auto insurance is to how much auto insurance you actually need.

There are several common types of vehicle insurance, each providing its specific coverage to the car and its owner:

• Comprehensive insurance covers any damage to your car that isn’t caused by an accident, such as a tree branch cracking the windshield or theft.

• Liability insurance covers the cost of automobile and bodily injury in a collision.   

• Full coverage insurance refers to a combination auto insurance policy, a mix of both comprehensive and liability insurance.

Nearly every U.S. state requires car owners to have some type of insurance. A “full coverage” policy often covers accidents and unexpected damage. 

Comprehensive auto insurance covers any damage to the car that isn’t an accident. That could mean:

• Theft or vandalism

• Fire 

• Windshield or glass damage

• Falling objects

• Storm or natural disaster damage

• Accidents with wildlife, like hitting a deer

Comprehensive auto insurance covers damage up to a maximum amount, which is typically tied to the total value of your car. Remember, that value depreciates as your car ages. 

Comprehensive auto insurance is similar to, but not the same as, collision insurance. Collision coverage will help cover the cost of damage to your car if you are at fault in an accident. The difference between the two policies comes down to who is responsible for the damage to your car.

For example, if you back into a pole, collision insurance can help pay for damage to the car. Comprehensive insurance would only pay for damage if the pole fell on your vehicle without you hitting it. 

Liability insurance protects you and your finances if you cause a car accident. This policy helps pay for damage to the other driver’s car (property damage) and the possible injuries they sustained in the collision (bodily injury). This policy protects you from paying out of pocket for the other driver’s medical or car repair bills. 

In almost all states, some form of liability auto insurance is required. Typically, that means you must show the state you can cover the costs of a car accident. Buying insurance is the easiest way to provide this proof.

If you don’t have a liability policy, you’ll likely have to post a bond that shows you could cover the cost of an accident, typically about $50,000. 

New Hampshire, South Carolina, and Virginia don’t require liability insurance, but that doesn’t mean you’re off the hook for medical and property damage if you cause a car accident.

Full coverage auto insurance is an umbrella policy that usually includes:

• Collision insurance

• Comprehensive insurance

• Liability insurance

It’s all rolled into a single, tidy policy. In many states, if you are financing or leasing a car, you must have a full coverage insurance policy to satisfy the lender. But, unlike liability insurance, full coverage is not required if you own your car outright or paid for it with cash. 

Full coverage auto insurance is more comprehensive than standard liability coverage. It will protect your finances in the event of a collision or a non-accident scenario, such as damage to your car from theft or natural disaster. 

You may wonder how much coverage you need. That depends on the following factors: 

• Vehicle value. If your car is old and not worth much, or you have cash to pay for damages out of pocket, you might not want a comprehensive plan. This only applies if you’ve paid your car off.

• Personal risk. If you have plenty of cash on hand in the event of an accident, you may opt out of insurance. This might require posting a bond to prove you can pay for damage to a person or property if you cause a car accident. This might all depend on your financial plan.

• Legal requirements. Most states require a liability insurance policy, whether you own or finance your car. If you’re leasing or financing your vehicle, you’ll likely need to sign up for full auto coverage. 

• The right insurance company. Insuring your car isn’t a one-size-fits-all decision. Before committing to a company, check out their Trustpilot reviews to help you find a trustworthy provider. 

• Value versus savings. Car insurance premiums can jump through the roof with extra bells and whistles. Keep an eye out for companies that save customers money on their monthly bills while still offering a valuable service, like this review of auto insurance company AutoComplete.

Looking for even more coverage? Most auto insurance carriers offer additional add-on policies for your vehicle. These add-ons are optional but could save you money in the long run. 

If your car breaks down or you damage your car in an at-fault accident, rental reimbursement will cover the cost of a rental car while your vehicle is being repaired. Many full coverage insurance policies include rental reimbursement. 

Learn more: How to rent a car: What to watch out for to ensure a smooth trip

Some companies offer a full glass coverage policy in addition to, but separate from, the comprehensive deductible. These policies are often “zero deductible,” meaning you won’t have to pay any costs out of pocket to replace a damaged or cracked windshield.

Insurance add-ons can provide peace of mind in the event of an accident. Whether your car is in the shop or needs a new windshield, you’ll pay less out of pocket. 

Car insurance is a necessity for most car owners, and getting the right policy can put you at ease when you’re behind the wheel. But the search for the right company can be daunting. That’s where reviews can help. 

A positive customer service experience, like this review of Illinois Vehicle Auto Insurance, can give you deeper insight into an auto insurer, even before you sign a contract. 

Looking for even more coverage? Learn more about the different types of insurance, or contact an expert for personalized advice.

Trustpilot is a review platform that is open to all. The companies and profile pages referenced in this article are provided for informational purposes only and are not recommended, endorsed by, or representative of the views of Trustpilot. The Trustpilot companies linked in this post are expected to abide by Trustpilot’s Guidelines, but have not been reviewed for compliance.