What Is Full Coverage Car Insurance? What It Includes & When It Makes Sense
Get the best full-coverage car insurance in Canada
For most car owners in Canada, a full-coverage car insurance policy offers the best financial protection. Full-coverage auto insurance quotes typically include:
- Third-party liability insurance, first-party accident benefits, and other coverage required by your province
- Physical damage protection for your vehicle, usually including collision and comprehensive car insurance.
“Full coverage” doesn’t refer to a specific combination of coverage types. Instead, it’s a catch-all category that describes car insurance quotes with coverage for your legal obligations and medical costs as well as damage to your own vehicle.
Lenders require some form of full-coverage protection if your vehicle has an active auto loan, but your options range from limited coverage from specified perils to a comprehensive “all perils” car insurance policy. When you request car insurance quotes with PolicyMe, we’ll pair you with a licensed insurance advisor who can help you analyze your finances, conduct a risk assessment, and offer tailored recommendations.
What does full coverage usually include?
Full coverage is a generic industry term that refers to an auto insurance policy with some combination of:
- Third-party liability insurance and other mandatory coverage: In Ontario, all personal car insurance policies must include minimum amounts of liability coverage, statutory accident benefits (SABS), uninsured automobile coverage, and direct compensation property damage (DCPD) coverage.
- Physical damage coverage for your insured vehicle: All drivers in Ontario can choose from a range of coverage options to cover vehicle damage caused by everything from crashes and potholes to hail, windstorms, theft, and rogue deer.
We’ll break down each category in more detail below.
Required liability and first-party coverage
The first portion of your full-coverage policy deals with insurance coverage for your legal responsibility as well as first-party benefits for medical costs and some vehicle damage.
In Ontario, mandatory coverage includes:
- Third-party liability: Covers bodily injury, property damage, and associated legal costs if you’re found responsible for a collision
- Uninsured automobile insurance: Covers medical costs and some vehicle damage for you and your family or passengers if you’re struck by an at-fault driver with no insurance (or an unidentified driver, like in a hit-and-run)
- Statutory accident benefits: Covers medical, rehabilitation, and attendant care for you, your household, and your passengers after a crash regardless of fault
- Direct compensation property damage (DCPD): Offers first-party coverage through your own insurance company for damage to your vehicle caused by a crash where you were fully or partially not at fault
As of 2024, DCPD coverage is technically optional in Ontario, since drivers can choose to opt out by completing and signing a written waiver. However, it’s included in all policies by default and insurance professionals recommend keeping this optional coverage when possible.
For a full-coverage insurance policy, you’ll likely want to increase the limits on all mandatory coverage beyond the minimum required by law. For instance, you may choose to:
- Set your third-party liability limits at $1 million or more: All you need to meet provincial requirements is $200,000, but most insurance professionals agree that this isn’t enough coverage for the average driver. Limits of $1 million give you more than triple the coverage at a minimal added cost.
- Extend your statutory accident benefits: Starting in July 2026, only medical, rehabilitation, and attendant care benefits will be required by law in Ontario, but other benefits, such as income replacement, will still be available and may offer significant value.
- Keep DCPD on your policy: Even though it’s technically optional, DCPD coverage is a key first-party benefit that can reduce the cost and hassle associated with an insurance claim.
Physical damage coverage
In addition to the standard coverage required by law, a full-coverage policy includes some form of physical damage coverage. The standard combination is collision plus comprehensive coverage:
- Collision coverage: Pays for damage to your vehicle caused by a collision, including single-car crashes, regardless of fault
- Comprehensive coverage: Pays for damage to your vehicle caused by something other than a collision, including fire, severe weather, theft, vandalism, falling objects, and some collisions with animals
However, you may have the option to either scale up or scale down your coverage with specified perils or all perils coverage:
- Specified perils: Essentially a lighter version of comprehensive coverage, this coverage only covers a specific list of non-collision perils. It typically excludes vandalism and falling objects, but includes theft, fire, and wind/hail.
- All perils: All perils coverage combines collision and comprehensive coverage with a single shared deductible. It’s the broadest form of physical damage coverage for your vehicle, with fewer exclusions than specified perils or comprehensive insurance.
There’s no single formula for full-coverage car insurance in Canada, so it’s up to you to mix and match the options above to find the right level of coverage for your finances. If you’re not sure how much car insurance you need, a licensed insurance advisor can work with you to see which options may be the best fit for your insurance needs.
What full coverage does not automatically include
Full coverage doesn’t cover everything. Common auto insurance coverage add-ons not automatically included in full coverage include:
- Coverage for rental cars or alternate transportation when your vehicle is in the shop following a covered claim
- Accident forgiveness for your first at-fault accident
- Roadside assistance for vehicle breakdowns away from home
- Waiver of depreciation to extend the value of your physical damage coverage
While this additional coverage isn’t included in all full-coverage policies, it’s worth noting that you may need full coverage—that is, collision and comprehensive insurance—in order to add the endorsements listed above to your car insurance coverage.
How deductibles affect your premium and protection
Deductibles are a key feature of the physical damage portion of your full-coverage car insurance policy. High deductibles for comprehensive and collision insurance can lower your car insurance premiums, while low deductibles raise premiums in exchange for lower out-of-pocket costs in the event that you have to make a car insurance claim.
A car insurance deductible is the dollar amount you agree to pay on each claim you make using a certain type of coverage, such as collision coverage. If your collision deductible is $500, your insurer will deduct $500 from the total value of any collision insurance claim.
Deductibles act as a form of risk-sharing to reduce small claims and keep costs low for your insurer. Without deductibles, premiums would be sky-high to account for the cost of millions of small claims annually.
How much does full-coverage car insurance cost?
Full-coverage car insurance costs more than the default minimum coverage required by law, but costs may look different for each car owner in Ontario. That’s because your coverage selections are just part of what determines the cost of car insurance. Insurers will also look at:
- Your age and driving experience: Younger drivers who have had their license for less than seven years typically pay the highest rates, with seasoned drivers in their 50s and 60s paying lower premiums.
- Where you live: Crash rates, property crime statistics, and weather patterns in the area where you drive and garage your car can raise or lower the cost of a full-coverage insurance plan.
- Your driving record: Past tickets, car accidents, or other at-fault incidents in the past three to five years could raise your insurance rates.
- Your vehicle: Full coverage for a brand new car costs more, because your policy must cover a higher insured value. The same goes for high-end vehicles of any age, sports cars, and vehicles with risk factors like a large engine or custom modifications.
- Your driving habits: Infrequent drivers, those with short commutes, and those with a demonstrated history of safe driving typically pay lower premiums.
The only way to know how much full coverage will cost you is to request personalized auto insurance quotes. But if you’re not quite ready to shop, the table below can give you a ballpark estimate of what you might pay for this coverage.
Look for the profile closest to your own for a hint of what your final quote could look like.
* The rates above control for all factors and coverage choices except age, coverage level, and location, and are used for illustrative purposes only. Your actual premiums will vary based on your age, vehicle, location, driving history, insurer underwriting criteria, and more.
Is full-coverage car insurance worth it?
For most Canadian car owners, full-coverage car insurance is worth the cost.
It’s not just peace of mind you’ll get by purchasing full coverage. After all, full coverage won’t prevent crashes, falling tree limbs, or determine thieves. Instead, think of full coverage as a direct route to financial recovery if you do face one of the covered perils.
To understand why full coverage is so important, it’s helpful to visualize the out-of-pocket costs you could face if you don’t carry this type of coverage.
- Broken windshield: $250–$1,000+
- Body damage: $5,000+
- Catalytic converter theft: $2,000–$3,000+
- Totaled vehicle: $33,000+ (used)–$65,000+ (new)
- Stolen vehicle: $33,000+ (used)–$65,000+ (new)
Before deciding whether or not to purchase a full-coverage policy, consider the following questions:
- Could you afford to replace your car out of pocket if it was stolen or totaled?
- Would you be able to get by without your insured vehicle if it was stolen or totaled?
- Is the cost of one year’s worth of collision and comprehensive coverage premiums greater than your car’s current cash value?
A licensed insurance advisor can help you weigh these questions and make an informed decision about your coverage.
FAQ: Full coverage car insurance
This article is for general information only and is not insurance or legal advice. Examples and any sample quotes or rate ranges are illustrative and do not constitute an offer or guarantee of coverage, price, or eligibility. Actual coverage, discounts, and premiums depend on your individual circumstances and the insurer provider; if there is any discrepancy, your policy and insurer documentation govern. For advice about your situation, speak with one of our licensed insurance professionals.