Margaret Huntley Last Updated On: September 21, 2023

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What’s the Difference Between Liability vs Full Coverage Insurance? Find Out Now

Full Coverage Car Insurance

You deserve great car insurance, no matter your finances or the age of your vehicle. But great car insurance can mean different things to different people. For some, it’s full protection no matter what happens. But for others, it’s the cheapest insurance they can find. 

This is why you have options for coverage. Two of those options are liability-only coverage, while another is what’s commonly referred to as “full coverage”. But what do they mean, and which is better?

We’ve got the answers and more, next. 

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What Is Liability-Only Car Insurance?

If you’re looking to save on car insurance costs, you have likely come across the term liability car insurance. Simply put, it’s coverage for only the damage you cause in an accident—essentially, the damage you’re liable for. 

Liability insurance is one bucket of coverage in a car insurance policy. It covers your liability for bodily injuries and property damage in an at-fault accident. This means that if you cause an accident, you and your insurance are on the hook for the medical costs of the other party and any property damage you caused, such as damage to their vehicle.

In most states, you need to have at least liability coverage to get behind the wheel. You might also hear it referred to as “minimum coverage”, because it’s the bare minimum of car insurance you legally need to have to drive. 

Keep in mind, liability-only coverage only protects the other driver, not you. If you want more comprehensive coverage, next we’ll explore full coverage and what it entails. 

Full Coverage Car Insurance Explained

On the flip side, you can opt for full coverage car insurance. This is a popular term in the insurance industry and it refers to the following buckets of coverage:

  • Liability (bodily injury and property damage)
  • Collision
  • Comprehensive

With full coverage, you’ll get the same liability coverage that’s included in liability-only insurance, but you’ll also get protection for your vehicle in the form of collision and comprehensive coverage. Collision protects you from damages resulting from colliding with another vehicle or a stationary object. Comprehensive protects your vehicle from anything else, like hitting an animal, weather-related damage, theft, vandalism, and more. 

That’s the extent of full coverage, but there’s more coverage you can choose. If the above list doesn’t feel like enough protection, keep reading. 

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Optional Coverage Add-Ons

We’d be remiss if we didn’t help you explore all of your car insurance coverage options. While some people might be happy with liability-only insurance, others might want as much protection as they can get, and that’s okay. 

Car insurance can be thought of as a buffet; as long as you’re meeting your state’s minimum car insurance coverage, you can pick and choose add-ons that make sense for you and your wallet. 

Here are some common add-ons (also known as riders or endorsements) you can choose from: 

  • Roadside Assistance: Getting stranded by the side of the road can be a nightmare. This roadside assistance rider ensures you can get a tow to a nearby service shop or enjoy minor fixes on the go, like a battery jump. 
  • Medical Payments: You may have noticed that liability coverage only protects the other drive. That means that any injuries you sustain are yours to pay for. With medical payments (MedPay), you get funds to cover your medical bills and those of your passengers after an accident, regardless of who caused it.
  • Personal Injury Protection: Also known as PIP, this is similar to MedPay in that it gives you funds to pay for medical costs after an accident. But it also helps cover other costs that result from an accident, like lost wages, childcare, and more. Some states do not have PIP, but only MedPay. 
  • Uninsured/Underinsured Motorist: This covers you from drivers that don’t have car insurance or don’t have enough of it (especially in the case of hit and runs), leaving you on the hook to cover the difference. This kicks in so that you don’t have to pay out of pocket should their insurance not cover the costs. 
  • Rental Car Reimbursement: If you’re in an accident and insurance pays to repair your vehicle, that’s great. But it can take weeks for your insurance claim to be approved and your vehicle repaired, and you’ll likely need a rental car to get by. This coverage ensures you’re not paying out of pocket for those rental car costs. 
  • Gap: If your vehicle is financed or leased and you’re not done paying it off, gap insurance helps cover the remaining amount if your vehicle gets totalled and becomes written off. Oftentimes, the amount insurance reimburses you for isn’t enough to pay off the vehicle, so this coverage fills in the gap. 
  • Rideshare: If you use your vehicle for rideshare services like Uber or Lyft, you need added rideshare insurance. Otherwise, your regular coverage won’t protect you when you’re driving a customer. 

Keep in mind, minimum coverage varies by state. That means that in some states, coverage like uninsured motorists or MedPay are actually required as part of the state minimums to drive. You can find more info on minimum coverage by state here

These are just some of the options available to you in your car insurance buffet. Whether you fill up your plate or save room for later, the choice is yours when it comes to your coverage. 

The Difference in Costs: Liability vs Full Coverage

You know you have options when it comes to car insurance coverage. But for many of us, the choice often comes down to cost. If that sounds like you, or you just want to get an idea of what to expect between the two coverage types, here are some fast facts you can use:

  • The average cost of minimum coverage (usually liability-only, depending on the state) is $622 per year in the U.S.
  • The average cost of full coverage in the U.S. is $2,014 per year

In most states, your gender will also play a role in how much you pay. Some states, like California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania, don’t allow insurers to factor in gender. But outside of these states, you’ll pay less on average if you’re female. This is because women are less likely to engage in risky driving behavior. 

Here are some numbers to put it into perspective:

  • Men pay an average of $539 per year for minimum coverage, or $1,778 per year for full coverage
  • Women pay an average of $551 per year for minimum coverage, or $1,764 per year for full coverage

But that’s not all. Where you live, down to your county and zip code, affect the premiums you’ll pay. Urban cities typically pay more in car insurance, since the risk of an accident is higher than in rural counties. Here are some average costs by state to give you an idea:

  • Utah pays an average of $539 for minimum coverage and $1,510 for full coverage
  • Texas pays an average of $565 for minimum coverage and $2,019 for full coverage
  • Ohio pays an average of $338 for minimum coverage and $1,266 for full coverage
  • Florida pays an average of $1,128 for minimum coverage and $3,183 for full coverage
  • California pays an average of $636 for minimum coverage and $2,291 for full coverage
  • New York pays an average of $1,371 for minimum coverage and $3,139 for full coverage

These are just some examples to help give you an idea of how much average costs can vary by location. If you’re ready to see how much you can expect to pay in your state, go ahead and get access to quotes here

Is Liability-Only or Full Coverage Right for Me?

Great question. The answer to this will depend on how much you’re looking to spend and how much protection you want from your car insurance. 

To recap:

  • Liability-only car insurance only covers damage you cause to others, including bodily injury and property damage. It does not protect you from any medical costs or vehicle repairs you might incur from the accident. 
  • Full coverage car insurance includes liability, but also collision and comprehensive. This means that your vehicle is now also covered for damages, but still not your medical costs.
  • Liability is more affordable than full coverage, because it offers less protection, but you could end up paying more out of pocket if you’re involved in an accident.

If you’re looking to spend as little as possible on car insurance and you have an older vehicle, you might be fine with liability-only coverage. Or you might want liability only if you don’t own a vehicle but drive one occasionally (find out more on non-owner car insurance here). 

But if you want more protection and have a nicer car, you might be better off with full coverage. If you’ve already got a policy in place but are itching to make a change, read this first. 

Only you can choose which option is right for you. Getting a sense of the costs for both options can help you decide which route to go, so go ahead and click here for access to free quotes. 

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Key Takeaways: Liability vs Full Coverage Car Insurance

Now that you’re an expert on the difference between liability and full coverage insurance, you’re ready to set up your own coverage. The choice for coverage is yours, as long as you’re meeting your state’s minimum coverage requirements (which is usually at least liability). 

Remember: liability-only coverage only protects the other driver from bodily injuries and their vehicle from property damage in an accident you caused. Full coverage also protects your vehicle from damage in a number of scenarios. 

Ready to explore your options? Click here for access to free quotes fast and you’ll be on the road to great insurance coverage. 

We’ve got you covered. 

Margaret Huntley Margaret Huntley is a creative writing and philosophy student at Western University. She has been working as a freelance writer for over two years and has written about everything from insurance, to poker, to health and wellness for international businesses.

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