"Full Coverage" Isn't Real: Collision and Comprehensive

"Full coverage" is not a product any insurer sells. It is shorthand for three separate coverages bought on one contract — liability, collision and comprehensive — and the National Association of Insurance Commissioners says so flatly: "there is no such thing as a 'full coverage' auto insurance policy."

What does "full coverage" actually mean?

Three coverages bought together, each priced and each claimed separately. The NAIC's Shopping Tool for Auto Insurance states that policies "are made up of different types of coverages" and that "each coverage you buy is priced separately." The phrase does damage because "full" is a word about completeness, and none of the three coverages is. A driver who thinks they bought a complete product does not read the exclusions, and meets them on a claim.

Here is what the shorthand contains, priced with the NAIC's 2023 countrywide averages from its Auto Insurance Database Average Premium Supplement (June 2025):

Those sum to the NAIC's countrywide combined average premium of $1,438 for 2023 — an average across every driver, vehicle, limit and deductible, not a quote. The full anatomy of a car policy, including what this bundle leaves out, is in how car insurance works coverage by coverage.

What does collision pay, and what does comprehensive pay?

Collision pays to repair your car after an impact or a roll-over; comprehensive pays for damage from nearly everything that is not an impact. In the NAIC's words, collision "pays to repair your car. Or if the insurer decides your car is 'totaled,' it pays you your car's actual cash value," while comprehensive covers "fire, theft, vandalism, falling objects, hail, flood, or an accident involving a bird or animal."

The policy language is narrower. The ISO Personal Auto Policy, form PP 00 01 09 18, defines "collision" as "the upset of 'your covered auto' or a 'non-owned auto' or their impact with another vehicle or object," then names the specific perils counting as other-than-collision. Anything outside both lists is outside both coverages.

Each carries a deductible, payable, in the NAIC's words, "any time you file a claim with your insurance company — even if you are not at fault for the damage."

What does the combination still leave uncovered?

Four things, none obscure.

The car breaking down. Part D of the ISO form excludes "damage due and confined to" wear and tear, freezing, "mechanical or electrical breakdown or failure," or road damage to tires — wording unchanged since the 1994 edition filed with the Maine Bureau of Insurance. A transmission that fails on its own is neither a collision nor an other-than-collision peril.

What was inside the car. Part D covers loss to "your covered auto" or a "non-owned auto", "including its equipment" — not the laptop on the passenger seat. Property taken from a car is normally a homeowners or renters claim; the Insurance Information Institute's renters insurance page confirms "property stolen from your car would be covered" off-premises, subject to a sublimit — its example is $2,500 on $25,000 of personal possessions coverage.

Driving for an app. The 2018 ISO form excludes loss while the car "is being used as a public or livery conveyance" — now defined to include "any period of time" it "is being used by any person who is logged into a 'transportation network platform' as a driver, whether or not a passenger is 'occupying' the vehicle." Logged in with an empty car is inside the exclusion, as the California Department of Insurance warns in its notice to transportation network company drivers.

The gap between what the car is worth and what is owed on it. That needs its own section.

Why does a totalled car sometimes not clear the loan?

Because the policy pays what the car is worth, and the loan is what you agreed to owe. The ISO form's Limit of Liability caps payment at "the lesser of" the car's "actual cash value" or the cost to repair it, with "an adjustment for depreciation and physical condition" made in a total loss.

Nothing in that clause references the debt. A car financed with little down over a long term can be worth less than its balance for much of the schedule, and a total loss inside that window leaves a borrower still paying for a car they no longer have.

The NAIC names the product built for it: Guaranteed Asset Protection, "sometimes called loan/lease coverage or debt cancellation," which "may help pay off what you owe if you owe more on your car than it is worth." It is sold separately, and is not part of what anyone means by "full coverage."

When do collision and comprehensive stop paying for themselves?

When the most the coverage could ever pay stops being large next to what it costs to hold. The rule usually repeated — premium under about ten percent of the car's value — is a shortcut around arithmetic worth doing properly, because the ceiling on these two coverages is not the size of the loss. It is the car.

Both pay the lesser of repair cost and actual cash value, minus the deductible. So the maximum recovery on a total loss is the car's actual cash value less the deductible — a number that falls every year the car ages, while the premium need not follow. Set the NAIC's 2023 averages — $463.69 plus $238.21, or $701.90 a year — against that ceiling at a $500 deductible:

An illustration built on countrywide averages — not a quote, and not a prediction about any policy or car.

Now add how often the coverages are called on. ISO data published by the III puts collision claims at 4.20 per 100 earned car-years in 2021 and comprehensive at 3.15 — one physical damage claim per 13.6 car-years insured. The average claim is nowhere near a total loss either: $5,010 for collision and $2,042 for comprehensive in 2021, rising to $5,992 and $2,738 in 2022.

On a $15,000 car, twenty years of average premium sit beneath a single potential payout. On a $2,000 car, two years of premium buy a maximum recovery of $1,500 on an event arriving about once every fourteen car-years. The question that raises is whether the largest possible payout on this car is a loss you could absorb unaided — and only a licensed provider can say what keeping or dropping either coverage would do to your premium.

For many drivers there is no question, because the choice is not theirs. The NAIC states that "state laws do not require you to buy physical damage coverages for your car, but your lender may, at least until you pay off your loan," and the III's auto insurance basics page agrees. Under a lien or a lease, dropping it is a default on the finance agreement, not an insurance decision.

Where this arithmetic breaks down

A rented or borrowed car sits inside the same coverage. On a loss to a "non-owned auto" the insurer provides "the broadest coverage applicable to any 'your covered auto' shown in the Declarations" — so dropping collision on an old car usually drops what would have responded to a rental.

The two halves have different economics. ISO's figures show comprehensive claim frequency rising from 2.62 per 100 car-years in 2012 to 3.15 in 2021, while collision frequency fell from 5.57 to 4.20. Comprehensive is about a third of the physical damage premium and covers perils indifferent to the car's age. Nothing requires the two to be kept or dropped together.

Actual cash value is a method, not a number. The form gives the insurer a valuation approach, not a figure; total loss thresholds and the right to dispute a settlement are set by state law.

Averages describe portfolios, not cars. What one car costs to insure for physical damage turns on its own loss history and a long list of other inputs, covered in what actually moves a car insurance rate.

How do you compare two policies carrying the same label?

By ignoring the label and comparing five lines under it: the liability limits, the two deductibles, whether uninsured and underinsured motorist coverage is included and at what limit, and any rideshare or delivery endorsement. The III reports that 80 percent of insured drivers buy comprehensive and 76 percent buy collision — ordinary enough, and no evidence two versions match. The liability limits carry the largest sums, and what happens when a claim runs past them is in what 25/50/25 means and what happens above the limit.