Liability vs. Full Coverage Insurance: What’s the Difference?
Discover the differences between these two types of coverage.
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Jeff Green has held a variety of sales and management roles at life insurance companies, Wall street firms, and distribution organizations over his 40-year career. He was previously Finra 7,24,66 registered and held life insurance licenses in multiple states. He is a graduate of Stony Brook University.
No matter how cautious you try to be, accidents happen. The purpose of car insurance is to protect you financially in case you’re involved in an accident. There are lots of options for coverages, limits, and deductibles. But which options are the best fit for you?
Maybe you just need the state minimum liability insurance. Or maybe you’d like the extra protection that full coverage insurance gives you.
Regardless, liability insurance and full coverage car insurance are different, and we’ll give you the facts about each so you can make an informed decision.
In a nutshell, liability insurance will cover damage to other vehicles or injuries to other people if you’re at fault in an accident. Full coverage insurance includes liability but also covers the damage to your vehicle, even if it’s not from a collision.
What’s the Difference between Liability and Full Coverage Insurance?
Let’s start with the basics. The main difference between basic liability insurance and full coverage is this: With liability insurance, if you’re in an accident, repairs are only covered for the car you hit – not for your car. But with full coverage, both vehicles are covered for repairs.
If you cause an accident, liability insurance covers the costs for injuries to the driver of the other vehicle and their passengers, plus the damage to their car or other property up to the limits of your policy. But a liability-only policy does not provide coverage if you or your passengers are injured or if your car is damaged.
A full coverage policy includes liability insurance, as well as comprehensive and collision coverage, which helps pay for the damage to your car. It also covers theft and vandalism.
Different states have different minimum requirements, which can include:
- Bodily injury liability insurance
- Property damage liability insurance
- Uninsured/underinsured motorist insurance for bodily injury
- Uninsured/underinsured motorist insurance for property damage
- Personal injury protection or medical payments coverage
While full coverage insurance is not required in any state, if you lease a car or buy one with bank financing, you may be required by the lender to have a full coverage policy.
Liability Insurance vs. Full Coverage Insurance
| Liability | Full Coverage | |||||
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| Average Annual Cost | $720 | $1,997 | ||||
| Is it Required? | Required by every state | Required if you lease or finance a car | ||||
| Deductible | No | Yes | ||||
| Best Choice | If you only want minimum coverage or your car is older | If you can afford to pay for full coverage and want maximum protection |
What Is Liability Insurance?
Liability insurance covers the costs associated with claims for bodily injury or property damage. Without it, if you cause an accident and injure someone else or damage their property – whether it’s a vehicle, fence, or something else – you could be sued. Liability insurance protects you.
Liability insurance provides coverage for:
- Bodily injury: Pays for injuries to other people in accidents that you cause, but not injuries to you or passengers in your vehicle.
- Property damage: Pays for property damage in accidents that you cause, but not damage to your own vehicle.
Get more information about liability insurance for your vehicle.
What Is Full Coverage Insurance?
Full coverage insurance provides protection for you – not just the other driver.
Full coverage includes:
- Collision: Helps pay repair costs for damage to your car if you hit an object or if another driver crashes into you, and it comes with a deductible. The higher the deductible, the more you’ll pay for repairs out of pocket.
- Comprehensive: Protects your vehicle from non-collision events, including vandalism, fire, and theft.
How Much Does Liability vs. Full Coverage Insurance Cost?
Liability-only coverage costs less than full coverage. In fact, you can save several hundred dollars a year if you choose liability insurance only. Keep in mind, though, that while you might save money in the short term, you also give up the additional protection that full coverage offers, which could result in big expenditures down the road.
Nationally, the average cost of liability insurance per year is $650.43, while the average cost of full coverage is $1,070.47.
Cost of Liability Insurance vs. Full Coverage Insurance
| Liability Insurance | Full Coverage Insurance |
|---|---|
| $650.43 | $1,070.47 |
Liability vs. Full Coverage Cost by Insurance Carrier
As you shop around for insurance, you’ll find that rates for liability insurance and full coverage can vary greatly from provider to provider. It pays you to do your research. That’s where an independent agent can help.
| Company | Minimum Liability | Full Coverage |
|---|---|---|
| State Farm | $543 | $1,315 |
| Progressive | $889 | $2,038 |
| Nationwide | $916 | $2,127 |
| Allstate | $918 | $2,354 |
| Farmers | $959 | $2,527 |
Liability vs. Full Coverage Insurance Cost by State
What you pay for liability insurance and full coverage insurance per year can vary based on where you live.
| State | Liability | Full Coverage |
|---|---|---|
| Alabama | $527.20 | $1,097.50 |
| Alaska | $584.90 | $1,141.88 |
| Arizona | $662.55 | $1,198.79 |
| Arkansas | $484.37 | $1,097.56 |
| California | $627.77 | $1,219.48 |
| Colorado | $704.82 | $1,335.09 |
| Connecticut | $799.45 | $1,346.24 |
| D.C. | $819.36 | $1,580.78 |
| Delaware | $897.87 | $1,388.94 |
| Florida | $997.20 | $1,505.89 |
| Georgia | $829.86 | $1,430.83 |
| Hawaii | $478.83 | $955.65 |
| Idaho | $433.66 | $596.91 |
| Illinois | $521.11 | $1,017.03 |
| Indiana | $444.98 | $872.81 |
| Iowa | $350.31 | $822.99 |
| Kansas | $426.14 | $998.54 |
| Kentucky | $609.98 | $1,086.00 |
| Louisiana | $1,023.91 | $1,761.26 |
| Maine | $375.40 | $787.86 |
| Maryland | $749.18 | $1,347.40 |
| Massachusetts | $664.92 | $1,261.83 |
| Michigan | $979.47 | $1,620.02 |
| Minnesota | $502.32 | $991.07 |
| Mississippi | $544.43 | $1,148.01 |
| Missouri | $527.59 | $1,069.67 |
| Montana | $437.69 | $1,036.98 |
| Nebraska | $431.71 | $973.87 |
| Nevada | $925.71 | $1,419.49 |
| New Hampshire | $442.52 | $897.15 |
| New Jersey | $958.31 | $1,510.57 |
| New Mexico | $584.25 | $1,122.56 |
| New York | $932.46 | $1,575.13 |
| North Carolina | $392.06 | $874.53 |
| North Dakota | $312.30 | $861.37 |
| Ohio | $447.86 | $882.78 |
| Oklahoma | $504.79 | $1,113.85 |
| Oregon | $684.81 | $1,076.26 |
| Pennsylvania | $548.58 | $1,102.67 |
| Rhode Island | $918.30 | $1,550.52 |
| South Carolina | $715.26 | $1,244.50 |
| South Dakota | $337.11 | $932.81 |
| Tennessee | $479.43 | $1,000.93 |
| Texas | $650.17 | $1,370.19 |
| Utah | $615.15 | $1,050.70 |
| Vermont | $374.06 | $856.32 |
| Virginia | $491.51 | $964.69 |
| Washington | $705.11 | $1,151.62 |
| West Virginia | $515.20 | $1,093.67 |
| Wisconsin | $421.21 | $840.16 |
| Wyoming | $356.08 | $983.49 |
Note: These costs are just averages. An independent agent can give you a personalized quote that’s based on the kind of vehicle you drive and where you live.
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Do I Need Liability Insurance or Full Coverage?
Choosing the right kind of auto insurance for your needs is an important decision. Is liability enough or should you opt for full coverage? There are lots of things to consider:
The age of your vehicle: Because of vehicle depreciation, it may make financial sense to carry liability-only insurance if your car is more than 10 years old.
The value of your vehicle: If your car is worth $3,000 but is covered for $10,000 or more, you might be paying too much for full coverage.
The mileage on your vehicle: Insurance premiums are often lower for a car with higher mileage. Research full coverage costs and consider whether you might be paying too much.
If the car is leased or financed: Lenders will generally require you to have full coverage – including collision and comprehensive insurance – if you finance or lease a vehicle.
Can you afford to repair or replace your car if it’s wrecked or stolen? If you can afford the out-of-pocket costs of repairing or replacing your vehicle without the aid of insurance, liability-only coverage might be right for you.
Finding Liability and Full Coverage Insurance Quotes
If you need auto insurance, whether it’s liability or full coverage, a good place to start is with an independent insurance agent. You’ll be matched with an expert who can answer your questions, determine your needs, and get you a personalized quote so you can hit the road with confidence.
FAQs about Liability vs. Full Coverage
Full coverage car insurance covers bodily injury, property damage, collision and comprehensive coverage. Some policies might also include personal injury protection, medical payments coverage, and uninsured/underinsured motorist insurance.
Yes. If you’re found at fault, liability coverage (which is included in full coverage) will help pay for damage or injuries you might cause to others.
Full coverage is a blanket term for a policy that includes liability, collision, and comprehensive car insurance. If you have all of these, you have full coverage. You can contact your insurance provider or an independent agent if you have questions.
Costs can vary based on the make, model, and value of your vehicle. You can expect to pay between $1,000 and $2,500 per year for full coverage insurance on a new car. Contact an independent insurance for a personalized quote.
Costs vary by state and other factors, including your driving record. You can expect to pay between $300 and $900 per year for liability-only insurance. Contact an independent agent for a personalized quote.
No. if you are at fault in an accident, liability insurance covers only injuries and property damage for the other driver, but not for you, your vehicle, or your passengers. With full coverage, both vehicles, and injuries incurred by all parties, are covered.
Liability insurance is required in all states, but full coverage is not. You might want to consider liability-only coverage if:
- Your vehicle is 10+ years old
- Your vehicle is valued at less than the full coverage amount
- You aren’t leasing or financing a vehicle
- You can afford to replace your vehicle outright if it’s totaled
If your car is totaled and you don’t have collision coverage, you will be on the hook for the cost of repairs. Collision insurance, which helps pay for repairs or replacement after you meet your deductible, is included in full coverage policies.
No, liability insurance does not cover your car if someone hits you; their insurance should cover that up to the limits of their policy. Your liability insurance only covers the other person if you hit them.
Full coverage offers greater protection and might be a good choice if you want protection for your vehicle and can afford the higher premiums. Keep in mind that if you lease or finance a car, you’ll need full coverage. If you’re interested in changing your coverage, talk to an independent insurance agent who can assess your needs and give you a personalized quote.
https://www.iii.org/article/auto-insurance-basics-understanding-your-coverage
https://www.iii.org/fact-statistic/facts-statistics-auto-insurance