🛡️ Is "full coverage" a real type of insurance I can buy?

Technically, no . "Full coverage" is just a common term people use for a policy that includes liability, collision and comprehensive coverage.

💳 Does gap insurance cover late loan payments or extras like extended warranties?

No. Gap insurance only covers the difference between your car's actual cash value and your remaining loan balance.

💵 If my new car is totaled, do I still have to pay my deductible?

Yes. Your deductible applies to all collision and comprehensive claims.

🚗 How soon do I need insurance on my new car?

You need insurance before you drive off the lot . Most dealerships won't let you leave without proof of coverage. If you already have a policy, check with your insurer. Many provide a grace period (typically 7–30 days) to add a new car.

📉 Why is new car insurance more expensive than used car insurance?

New cars have higher values and repair costs than used cars , which means insurers pay more if your car is damaged or totaled. Advanced technology like sensors and cameras also costs more to fix or replace than older, simpler parts.

Updated December 5, 2025

New Car Insurance: What You Need to Know

When people talk about “new car insurance” they’re not referring to a special type of policy. It’s the combination of coverages you buy for a brand-new car. For most, this means purchasing a full coverage policy that includes liability insurance, plus collision and comprehensive coverage.

Jerry has helped 5,305 drivers buy insurance for their new car in the past year, helping them get on the road fully protected. Here’s what to know about coverage for your new car.

Jerry pulls up to 20 quotes from top rated carriers.

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Do I need insurance on my new car?

Yes, your new car should be insured. It’s illegal to drive without car insurance, but it’s also wise to protect your new purchase.

Here’s different coverage types and when you need them.

Coverage type	What it covers	Do you need it?
Liability	Others’ medical bills and property damage when you’re at fault.	Required by law, except in New Hampshire.
Collision	Your car repairs after hitting another car or object.	Required if financing/leasing. Recommended for new cars.
Comprehensive	Damage to your car from theft, vandalism, weather and accidents with animals.	Required if financing/leasing. Recommended for new cars.
Uninsured/underinsured motorist	Your costs when hit by uninsured or underinsured drivers.	Required in some states. Strongly recommended everywhere.
Personal injury protection (PIP)	Medical bills, lost wages, childcare after an accident.	Required in no-fault states.
Medical payments (MedPay)	Medical expenses only after an accident.	Optional in most states, but may be worthwhile if you don’t have health insurance.

Liability

What it covers

Others’ medical bills and property damage when you’re at fault.

Do you need it?

Required by law, except in New Hampshire.

Collision

What it covers

Your car repairs after hitting another car or object.

Do you need it?

Required if financing/leasing. Recommended for new cars.

Comprehensive

What it covers

Damage to your car from theft, vandalism, weather and accidents with animals.

Do you need it?

Required if financing/leasing. Recommended for new cars.

Uninsured/underinsured motorist

What it covers

Your costs when hit by uninsured or underinsured drivers.

Do you need it?

Required in some states. Strongly recommended everywhere.

Personal injury protection (PIP)

What it covers

Medical bills, lost wages, childcare after an accident.

Do you need it?

Required in no-fault states.

Medical payments (MedPay)

What it covers

Medical expenses only after an accident.

Do you need it?

Optional in most states, but may be worthwhile if you don’t have health insurance.

Jerry recommends: Get higher liability limits than what your state requires, and consider limits of at least 100/300/100. One accident with injuries can cost over $160,000, according to the National Safety Council.

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How much does new car insurance cost?

Car insurance for a new car costs between $188 to $408 per month according to Jerry’s customer data.

Factors that affect new car insurance costs include:

🚗 Your car’s value and technology. More expensive cars, like electric vehicles, with advanced features like sensors, cameras and batteries cost more to repair, which increases insurance costs.

🛡️ Coverage choices. Higher limits and lower deductibles increase your policy costs.

📍 Location and driving habits. Your ZIP code, annual mileage, commute length and parking situation all affect how much you pay.

📋 Driving record. Tickets, accidents and gaps in your insurance history can raise your rates.

💵 Available discounts. New-car discounts, safe-driver programs, bundling home and auto or paying your premium upfront can lower your costs.

Jerry recommends: Compare car insurance quotes in the Jerry app before you get to the dealership. That way you’ll have your new policy ready and can quickly drive off the lot once you’ve purchased your new car.

Get insurance for your new car with Jerry

When shopping for coverage on your new car, it’s important to compare policies from multiple companies to find the right balance of protection and cost.

Jerry partners with over 50 insurance carriers and shows you quotes side-by-side, so you can see exactly how different coverage options and deductibles affect your premium. You can compare full coverage policies in minutes and find the right protection for your budget.

Skip the hassle. Jerry finds competitive quotes in minutes.

Gap insurance vs. new car replacement

Many drivers confuse these two coverages because they both deal with your car’s depreciation, or its loss in value over time. But they work differently.

New car replacement	What it does	Best for
New car replacement	Replaces your totaled car with a brand-new one.	Drivers who want a brand new car if theirs is totaled.

New car replacement

What it does

Replaces your totaled car with a brand-new one.

Best for

Drivers who want a brand new car if theirs is totaled.

Gap Insurance	What it does	Best for
Gap Insurance	Pays the difference between your car’s current value and what you still owe on your loan.	Drivers with low down payments or loans higher than the car’s market value.

Gap Insurance

What it does

Pays the difference between your car’s current value and what you still owe on your loan.

Best for

Drivers with low down payments or loans higher than the car’s market value.

Key takeaway: If you put little money down or bought a car that depreciates quickly, gap insurance should be your priority. If you can afford both, add new car replacement for even better protection.

Other coverages worth considering

Beyond full coverage, consider these optional add-ons to protect your new car.

🔧 Original equipment manufacturer (OEM) parts coverage:
Ensures that mechanics use original manufacturer parts instead of generic aftermarket ones, which can affect your car’s resale value and its safety.

🚙 Rental car reimbursement:
Provides a rental car while yours is being repaired for a covered claim.

🛣️ Roadside assistance:
Covers towing, jump-starts, flat tire changes and lockout services when you break down.

It only takes 2 minutes to sign up at Jerry.

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FAQ

🛡️ Is “full coverage” a real type of insurance I can buy?

Technically, no. “Full coverage” is just a common term people use for a policy that includes liability, collision and comprehensive coverage.
💳 Does gap insurance cover late loan payments or extras like extended warranties?

No. Gap insurance only covers the difference between your car’s actual cash value and your remaining loan balance.
💵 If my new car is totaled, do I still have to pay my deductible?

Yes. Your deductible applies to all collision and comprehensive claims.
🚗 How soon do I need insurance on my new car?

You need insurance before you drive off the lot. Most dealerships won’t let you leave without proof of coverage. If you already have a policy, check with your insurer. Many provide a grace period (typically 7–30 days) to add a new car.
📉 Why is new car insurance more expensive than used car insurance?

New cars have higher values and repair costs than used cars, which means insurers pay more if your car is damaged or totaled. Advanced technology like sensors and cameras also costs more to fix or replace than older, simpler parts.

Methodology

Data included in this analysis comes from policies that Jerry has quoted within the last 6 months for drivers with a clean record and that have full coverage, unless stated otherwise. Data related to violations, accidents or credit scores pull from quote data from the last 18 months. Jerry services 48 states and offers a range of insurance companies to choose from.

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Our experts

Ben Moore

Ben Moore is a writer and editor at Jerry and an auto insurance expert. He previously worked as a writer, editor and content strategist on NerdWallet’s auto insurance team for five years. His work has been published in The Associated Press, Washington Post, Chicago Sun-Times, MarketWatch, Nasdaq and Yahoo News. He also served as a NerdWallet spokesperson, with appearances on local broadcast television and quotes in Martha Stewart and Real Simple magazine.

Ben has an extensive background in digital marketing, working on affiliate and programmatic advertising campaigns for brands like Cabela’s, H&R Block and Sears. He holds a bachelors degree in marketing from Olivet Nazarene University.

^†Over the past 12 months, 25% of drivers who switched with Jerry paid $89 or less per month. Not all customers find savings. Savings depend on state, policy features, coverage, driving history and other factors.

Editorial Note: This article was written by a paid member of Jerry’s editorial team. Statements in this article do not constitute advice or recommendations. You should consult with an insurance professional about your specific circumstances and needs before making any insurance decisions.