Taking the time to find what level of car insurance coverage you need will not only help you make the right decision for your car, but also for your wallet. So, how do you decide between liability vs. full coverage car insurance?
In this article, we’ll examine what each auto insurance policy entails, when you may want to purchase liability vs. full coverage, and how much these types of insurance may cost you. We’ll also recommend a couple of the best car insurance providers based on our thorough industry research.
To see how much you might pay for liability and full coverage car insurance, compare free quotes from top-rated insurers by entering your zip code below.
In this article:
What’s The Difference Between Liability Vs. Full Coverage?
The difference between liability vs. full coverage car insurance isn’t that hard to figure out. Liability insurance covers property damage and medical expenses for other parties if you cause an accident. It’s legally mandated in almost every state. Full coverage auto insurance covers damage to your own vehicle as well.
One way to think about liability car insurance is that it’s not meant to insure you, but rather cover what you might hit with your car. There are two main components to liability insurance: bodily injury and property damage.
- Bodily injury liability covers medical bills for other drivers and their passengers when you cause a collision.
- Property damage liability covers other parties’ cars, fences, or other property in the event of an accident.
How much liability insurance you need depends on the state you live in. Most states require a certain amount of liability coverage for a motorist to hit the road, but you can always purchase a higher limit to ensure you’re protected after an accident.
For example, say your state requires $15,000 in bodily injury liability per person, $30,000 in bodily injury per accident, and $10,000 in property damage liability per accident – you may see these policies written as 15/30/10. If you’re in a wreck and cause $11,000 worth of property damage, your insurer will cover up to $10,000, but you’ll still have to pay the remaining $1,000 out of pocket.
The term “full coverage” can be a tad misleading. It doesn’t mean you have top-of-the-line insurance, it just implies you are covered in more scenarios. Full coverage includes liability insurance and at least two additional types of car insurance: collision and comprehensive.
Collision insurance provides peace of mind that if any damage occurs while you’re driving, it’ll be covered. This comes into play when you hit another car, an object, if you damage your vehicle while offroading, and a few other scenarios. Collision coverage is not usually offered as a standalone option – it’s often bundled with a comprehensive car insurance policy.
Comprehensive policies cover your vehicle in non-driving incidents, like if you incur damage from natural disasters, vandalism, or theft. The only driving-related incident that’s covered by a comprehensive insurance policy is if you hit an animal like a deer.
Is Liability Insurance Required?
The short answer is yes, if you own a car, you will more than likely be required to get liability insurance. The variation there is that some states require higher amounts of coverage than others. Twelve states operate under a no-fault system, which means every driver involved in a collision files a claim with their own insurance company, regardless of who was at fault.
This is one of the biggest differences between liability vs. full coverage insurance, as collision and comprehensive policies are not required in any state. However, if you lease or finance your vehicle, your lien holder may require you to have a full coverage policy while you’re making car payments.
What’s The Cost Of Liability Vs. Full Coverage Insurance?
You’ll likely need some amount of liability insurance per your state’s requirements, but it’s smart to secure a full coverage policy. When deciding between liability vs. full coverage insurance for your vehicle, consider what your personal finances will allow for. Be aware that your car’s age, mileage, and condition will factor into your auto insurance quotes, as well as the level of coverage you choose.
According to a 2020 report by the National Association of Insurance Commissioners (NAIC), the average U.S. driver spent a combined total of $1,133.92 for liability, collision, and comprehensive insurance coverage in 2017. Here’s a breakdown of the average premium cost for each type of policy, according to the report:
|Coverage Type||Average Cost|
It’s worth noting that while full coverage typically consists of liability, collision, and comprehensive coverage, different insurance providers may have different definitions for this term. This can also affect the price you pay for coverage.
Is It Worth Getting Full Coverage Insurance?
Deciding whether you need liability vs. full coverage auto insurance really hinges on one thing: your car. Things like your car’s age and mileage, as well as personal factors like your credit score and driving history, play into the rate an insurer will give you. So, the question becomes whether your car is worth the extra amount you’ll pay in premiums for a full coverage policy.
If you own a vehicle that’s 10 or more years old or has a higher mileage, you may end up paying more in premiums than your car is worth. To find the actual cash value (ACV) of your vehicle, you can check a site like Kelley Blue Book. Then, compare the ACV against your full coverage policy quote to determine whether the coverage is worth it.
If you own a newer car or one of high value, full coverage insurance is typically worth the investment. Paying a small fee each month can give you peace of mind on the road and save you thousands in the long run if you end up needing vehicle repairs due to an accident or other incident.
There are several scenarios that don’t fall under the umbrella of collision and comprehensive insurance. For instance, injuries you suffer after a collision will still need to be paid out of pocket if you’re found to be at fault. Additionally, these coverages won’t pay to repair your car if you’re struck by someone driving without insurance or who has insufficient liability coverage. However, there are separate insurance policies that can cover you in any of these situations.
Also, keep in mind that your auto insurance won’t pay for mechanical breakdowns, like if your air conditioning goes out or your transmission blows. If you want coverage for these types of repairs, you may be able to purchase mechanical breakdown coverage from your insurer, or you can look into an extended auto warranty.
Other Types Of Car Insurance
As you can see, whether you choose liability or full coverage car insurance, there will still be some gaps in your coverage. If you want even more financial security, here are some common policy add-ons that you can opt for:
- Medical payments (MedPay): This covers medical expenses for injuries that you and your passengers sustain during a collision.
- Personal injury protection (PIP): This also handles medical bills, but it extends to lost wages as well. Plus, it includes death benefits for you and passengers in the event of a fatal wreck. PIP covers you regardless of who is at fault and is required in no-fault states.
- Uninsured/underinsured motorist coverage (UM/UIM): This covers you if you’re in a car accident with a driver who’s uninsured or doesn’t have enough insurance to cover your medical bills or repair costs. In some states, this also provides coverage in the event of a hit-and-run.
- Roadside coverage: This coverage provides a level of assurance when your car breaks down or you’re stuck somewhere and need towing services, a battery jump, locksmith services, or help with a flat tire.
- Guaranteed asset protection (GAP): This coverage is a little bit more situational but is intended for drivers who are leasing or financing a car. It helps bridge the “gap” between the amount you owe on your car and the car’s actual value if it’s totaled or stolen.
Our Recommendations For Coverage
The cost of liability vs. full coverage insurance can vary from provider to provider, so it’s smart to shop around and get quotes from multiple companies before committing to a policy. If you’re not sure where to start, our review team has researched every major car insurance provider in the United States and found that Geico and Progressive are two standout options. Read more about them below, or start getting free quotes from these insurers and more by entering your zip code here:
Geico is one the largest auto insurance providers in the U.S. and is an excellent option due to its substantial network of agents, competitive rates, and simple claims process. The company offers all standard types of coverage, as well as a range of add-ons like rental reimbursement and mechanical breakdown insurance. AM Best also rates the company at an A++, which means it has a strong financial backing and an excellent ability to meet customer claim obligations. You can learn more in our full Geico auto insurance review.
Progressive is another well-reviewed company – it holds an A+ rating from both the Better Business Bureau (BBB) and AM Best. On top of offering several discounts for policy owners, such as for practicing safe driving habits or combining home and auto insurance policies, Progressive gives especially low rates to high-risk drivers. Check out our comprehensive Progressive auto insurance review for more information.