Choosing the right car insurance can be confusing, especially when deciding between full coverage and liability-only policies. Both options have pros and cons, and the best choice depends on your budget, vehicle, and risk tolerance.
In this guide, we’ll break down:
✔ What liability and full coverage insurance include
✔ Key differences between the two
✔ Who should get each type
✔ Cost comparisons
✔ How to decide which is right for you
What Is Liability-Only Car Insurance?
Liability insurance is the minimum required coverage in most states. It covers damages you cause to others but does not protect your own vehicle.
What Does Liability Insurance Cover?
- Bodily Injury Liability (BI)
- Pays for medical expenses of others if you’re at fault in an accident.
- Example: If you hit another driver, their hospital bills are covered.
- Property Damage Liability (PD)
- Covers repairs to another person’s car or property (like a fence or building).
- Example: If you rear-end someone, their repair costs are covered.
What Liability Insurance Does NOT Cover
❌ Your own injuries or car repairs
❌ Theft, vandalism, or weather damage
❌ Hit-and-run or uninsured motorist incidents (unless you add extra coverage)
✅ Best for:
- Drivers with older, low-value cars
- Those on a tight budget
- People who can afford out-of-pocket repair costs
What Is Full Coverage Car Insurance?
“Full coverage” isn’t a single policy—it’s a combination of liability + collision + comprehensive insurance.
What Does Full Coverage Include?
- Liability Insurance (as described above)
- Collision Insurance
- Covers repairs to your car after an accident (even if you’re at fault).
- Comprehensive Insurance
- Covers non-collision damage (theft, fire, hail, animal strikes).
Optional Add-Ons Often Included in Full Coverage
- Uninsured/Underinsured Motorist (UM/UIM)
- Medical Payments (MedPay) or Personal Injury Protection (PIP)
- Rental car reimbursement
- Roadside assistance
✅ Best for:
- Drivers with new or financed/leased cars (lenders usually require it)
- People who can’t afford major repairs out of pocket
- Those in high-risk areas (theft, extreme weather)
Key Differences: Full Coverage vs Liability Insurance
| Factor | Liability-Only | Full Coverage |
|---|---|---|
| Covers Other Drivers’ Damages | ✔ Yes | ✔ Yes |
| Covers Your Car Repairs | ❌ No | ✔ Yes |
| Covers Theft/Vandalism | ❌ No | ✔ Yes |
| Required by Law? | ✔ Yes (in most states) | ❌ No (but lenders may require it) |
| Average Annual Cost | 500–500–1,000 | 1,200–1,200–2,500+ |
Which One Do You Need?
Choose Liability-Only If You:
✔ Drive an old, low-value car (worth less than $5,000)
✔ Have enough savings to cover repairs
✔ Want the cheapest possible insurance
Choose Full Coverage If You:
✔ Have a new, leased, or financed car
✔ Live in an area with high theft or severe weather
✔ Can’t afford major repairs out of pocket
Cost Comparison: How Much More Is Full Coverage?
On average, full coverage costs about twice as much as liability-only.
| Driver Profile | Liability-Only (Annual Cost) | Full Coverage (Annual Cost) |
|---|---|---|
| Safe Driver (Clean Record) | 600–600–900 | 1,400–1,400–2,000 |
| Young Driver (Under 25) | 1,200–1,200–1,800 | 2,500–2,500–4,000 |
| High-Risk Driver (DUI/Accidents) | 1,500–1,500–3,000 | 3,000–3,000–6,000 |
✅ Tip: If your car is paid off but still valuable, consider dropping collision but keeping comprehensive (for theft/weather risks).
How to Decide: 3 Simple Questions
- Is your car financed or leased? → Full coverage required
- Could you afford a $5,000 repair or replacement? → If no, full coverage
- Is your car worth less than $5,000? → Liability may be enough
Final Verdict
- Liability-only = Cheaper, but no protection for your car
- Full coverage = More expensive, but peace of mind
Best advice: If your car is worth more than 5,000–5,000–10,000, full coverage is usually worth the cost. Otherwise, liability may suffice.
Need help deciding? Get quotes for both options and compare! 🚗💡