Full coverage car insurance doesn’t refer to any one type of coverage. Instead, it’s a policy that includes a bundle of insurance coverages such as:

• Liability coverage: This coverage can pay for the cost of injuries and property damage caused by your vehicle. Most states require you to have some type of liability coverage.
• Collision coverage: Helps cover damages to your car caused by colliding with another vehicle or object, like a mailbox or a guardrail.
• Comprehensive coverage: If your car is involved in flooding or hit by a falling tree, comprehensive coverage can help pay for the cost of your car. It also helps in cases of vandalism or theft, and if you hit an animal.

Some states require you to have other types of coverage as part of your insurance policy, and these can also be part of full coverage car insurance. Two common coverages that fall under this category are:

• Personal injury protection (PIP): This coverage can help pay for medical expenses and lost wages for you and your passengers.
• Uninsured or underinsured motorist coverage: This coverage can help reimburse you if you’re involved in a collision with an uninsured driver, or a driver carrying less coverage than what would cover a serious accident.

It’s worth noting that there’s no one definition of full coverage car insurance — the coverage included can vary from state to state, and different insurance companies can define full coverage in different ways.

Instead, it might be helpful to first determine what coverage types you need and then make sure that the full coverage car insurance policy includes them.

If you’re shopping for car insurance coverage, many companies offer full coverage car insurance policies, including some of CNBC Select’s top picks for the best car insurance coverage. Our best overall car insurance company, Geico, offers relatively low average rates, including maximum coverage rates. Nationwide also offers coverage in 47 states and the District of Columbia, and offers some of the lowest average premiums for full coverage.

If you’re considering full-coverage car insurance, it’s worth noting the difference between it and state minimum car insurance. Here are the main differences you need to know.

Pros

• Helpful in situations where you’re not involved in an accident, but your car would still be damaged, such as vandalism or a natural disaster.
• Would cover situations such as auto theft.

Cons

• Full coverage car insurance can cost a significant amount more than the minimum required coverage.

While the types of coverage included in full coverage policies may differ from policy to policy, they all attempt to financially protect you in a wide variety of scenarios.

For example, if you lose control on an icy road and crash into a tree, you’ll need collision insurance to help pay for repairing or replacing your vehicle. But your collision insurance won’t help you if your car gets stolen or vandalized — for that you need comprehensive coverage.

Full coverage car insurance attempts to fill the gaps in protection left by each individual coverage type, but keep in mind it’s rare for it to cover the personal property in your car. That’s where your renters insurance or homeowners insurance policy can step in.

Full coverage offers protection for more situations than state minimum coverage.

Generally, state minimum coverage only includes liability insurance (up to the limit required by your state), as well as uninsured motorist coverage and PIP (if required).

While liability car insurance will cover injuries, death, and property damage caused by your driving, it won’t help you with the common scenarios covered by comprehensive and collision coverage.

If you lease your car or bought it with a loan, your lender or leasing company may require comprehensive coverage and collision coverage. Lenders have a financial stake in your vehicle and generally require these coverages, which when paired together start to resemble full coverage auto insurance.

Most states don’t require comprehensive or collision coverage. However, if you don’t have the funds to replace your car on your own, these coverages might be helpful.

If you don’t have the money to replace your car out of pocket, you likely need full coverage auto insurance. The same holds true if you have a loan or lease on your vehicle, since full coverage insurance will probably keep you compliant with the terms of your lease or loan.

There are some cases where full coverage auto insurance doesn’t make sense. For example, if you have a very low-value vehicle and could cover the cost of a replacement on your own, full-coverage auto insurance might not be worth it.

According to data from Bankrate.com, the average full coverage auto insurance policy costs $2,014 per year, while the average minimum coverage policy costs $622 per year.

While full coverage auto insurance might be more expensive than having less coverage, it could be helpful to have if you’re in a situation where it’s needed.

However, there are ways to save on full coverage auto insurance. Getting several quotes from different insurance companies and comparing the types and amounts of coverage could help you find the best deal for you.

You might consider raising the deductible, or the amount you’ll pay before coverage kicks in, to lower your premium. Lastly, raising your credit score could also help reduce how much you’ll pay for auto insurance, as many insurers consider your credit score when pricing your policy.

Full coverage car insurance could help you replace your car if it’s stolen or damaged by something other than an accident. While it’s more expensive, it could be helpful if you need to replace your car.

Correction: A previous version of this story misstated what type of coverage applies to hitting an animal. It is comprehensive coverage.