State Minimum vs. Full Coverage Car Insurance

What's the difference between full coverage and state minimum car insurance?

State minimum vs. full coverage car insurance


The most common question related to car insurance is, "how much coverage do I need?" This question usually has a simple answer — and it's out of your hands. Your minimum required car insurance coverage depends on state laws and your vehicle ownership status. If your car is leased, the dealership — the owner of the vehicle — typically will dictate minimum insurance requirements. If you own your vehicle outright, you'll have more flexibility to carry the state minimum coverage.


Full coverage auto insurance vs. state minimum coverage
  1. What is covered by state minimum and full coverage car insurance?
  2. Which do you need: full coverage or state minimum?
  3. Costs: state minimum versus full coverage
  4. Additional resources



What is covered by state minimum liability and full coverage policies?


Because car insurance laws are written and enforced at the state level, your minimum coverage will vary based on your location. Most US states mandate the following:


State minimum auto insurance coverage:

  • Bodily injury liability: Covers medical bills resulting from an accident caused by you or someone on your car insurance policy.
  • Property damage liability: Covers physical damage to another person’s vehicle or property after an at-fault accident.
  • Uninsured or underinsured motorist coverage: Covers instances in which the at-fault party does not carry insurance or does not carry enough coverage to repay damages. These insurance options include bodily injury and property damage coverage. Uninsured and underinsured motorist coverage requirements vary by state.
  • Medical payments: Covers your medical bills, regardless of who is at fault. Medical payment coverage is required in some — not all — states.
  • Personal injury protection (PIP): Covers medical expenses for you and your passengers — regardless of fault — up to the coverage limit. PIP insurance is only required in no-fault car insurance states.

States mandate specific required coverage levels for each of the above insurance types. You'll need to meet or exceed your state's minimum coverage levels to drive legally.



Full coverage car insurance:

While state minimum auto insurance is straightforward, “full coverage” is a bit of a misnomer. “Full coverage” isn’t really a technical or accurate way to describe a car insurance policy. "Full coverage” usually denotes comprehensive and collision insurance, but can also comprise rental reimbursement and roadside assistance coverage.

  • Collision coverage: Covers your vehicle in an at-fault car accident. For example, if you hit a vehicle or fixed object.
  • Comprehensive coverage: Works with collision coverage to cover any other damage to your vehicle. Common examples include weather-related claims, theft, and damage caused by animals.
  • Rental reimbursement coverage: Covers the cost of a rental vehicle after an accident.
  • Roadside assistance: Covers towing and roadside service costs.

One major difference between state minimum and full coverages concerns who is covered. State minimum auto insurance generally includes liability coverage only, i.e., damage you cause to others. Full coverage insures you and your vehicle. So when do you need full coverage, and when will liability-only car insurance suffice?




Full coverage car insurance or liability insurance — which is better?


Leased and financed vehicles: full coverage required

You will be required to carry “full coverage” car insurance if you’re financing your vehicle. Since another entity — usually a bank or auto dealership — maintains an interest in the vehicle, they get to decide how the car is insured. Auto leasing and financing companies generally require collision and comprehensive coverage with low deductibles.

If you lease your car, you don't own the vehicle outright and you will be required to carry additional coverage to protect the asset. This often includes collision, comprehensive, and gap insurance.


Owned vehicle: full coverage optional

If you own your vehicle, you have complete control over your insurance. If you’re unsure of what coverage to select, consider your vehicle's value. Use an estimator like the Kelley Blue Book to assess the value of your vehicle and determine how much coverage you need.

If your vehicle is worth more than $4,000, collision and comprehensive coverage are recommended. Without these coverages, you would not receive compensation if your vehicle were severely damaged or totaled.




How much do full coverage car insurance and state minimum auto insurance cost?


Full coverage car insurance typically costs 60% more than state minimum liability-only coverage. We assessed the average cost of insurance by coverage level below (methodology).


Coverage Levels Average Annual Premium $ Difference from Full Coverage
State Minimum Liability Only $581 $847
50/100/50 BI-PD with 500 Comp-Coll $1,427 $87
100/300/100 BI-PD with 500 Comp-Coll $1,514 --

These values are estimates. Your location, vehicle, age, and driving history will impact your premium. If you're really interested in seeing insurance costs for full coverage versus the state minimum, enter your zip code below and compare prices in The Zebra's insurance search engine.



Find the right auto insurance policy for you!



Additional resources


Navigating the rules and regulations of car insurance can be tricky. If you’re looking for information on coverage and car insurance quotes, consult our additional resources:





Methodology


Between September and December 2017, The Zebra conducted comprehensive auto insurance pricing analysis using its proprietary quote engine, comprising data from insurance rating platforms and public rate filings. The Zebra examined nearly 53 million rates to explore trends for specific auto insurance rating factors across all United States zip codes, averaged by state, including Washington, DC.

Analysis used a consistent base profile for the insured driver: a 30-year-old single male driving a 2013 Honda Accord EX with a good driving history and coverage limits of $50,000 bodily injury liability per person/$100,000 bodily injury liability per accident/$50,000 property damage liability per accident with a $500 deductible for comprehensive and collision. For coverage level data, optional coverage (that must be rejected in writing) is included where applicable, including uninsured motorist coverage and personal injury protection.

National property and casualty losses information is from the Insurance Information Institute and the NOAA National Centers for Environmental Information U.S. Billion-Dollar Weather and Climate Disasters report.

For vehicle make and model data, analysis referenced the most popular vehicles in the U.S. by 2016 year-end sales according to Goodcarbadcar.net’s automakers’ data.

Some information may vary based on rounding.