Within this work, a state-of-the-art Arbitrary Lagrangian-Eulerian finite element model of a milling operation using coated hard metal cutting inserts is presented. During milling, the cutting depth constantly decreases, thus, to obtain the correct cutting depth, the model considers movement of the tool in a vertical direction. The behavior of the 42CrMo4 workpiece material is described using a standard Johnson-Cook material model. A detailed tool model able to represent both an uncoated and coated tool is created. The tool model is based on an industrial hard coated fine-grained hard metal tool with 8wt.% Co. Three hard coatings are investigated: (i) an arc evaporated TiAlN single layer, (ii) a chemical vapor deposited TiCN/α-Al2O3 bilayer and (iii) a chemical vapor deposited TiAlN/α-Al2O3 bilayer. An uncoated tool model is used as a reference to compare the results. The tool loading during milling is investigated. The calculated variables are cutting forces and the tool-workpiece contact length. The influence of the coatings on temperature, von Mises stress and accumulated equivalent plastic strain is simulated in the coating and the substrate. Measured and literature based thermal and mechanical material parameters are used to describe the material behavior of the coatings and the substrate