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Last updated: July 22, 2025
Full Coverage vs. Liability Car Insurance
Liability insurance only covers injuries and damage you cause to others; full coverage includes liability and protection for your own vehicle.
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Key Takeaways:
- Full coverage pays for damages to the other party in an at-fault accident and damages to your car in covered incidents. Meanwhile, liability coverage only pays for the other party’s damages in an at-fault accident.
- Full coverage is usually required if you lease or finance your vehicle. Lenders typically mandate comprehensive and collision coverage to protect their investment.
- Liability-only insurance can save money, but it may leave you financially exposed. If your car is valuable or newer, dropping full coverage could cost more in the long run after an accident.
When you’re buying auto insurance, you may not be exactly sure whether you should get full or liability coverage. We’ll explain more about the differences between full coverage and liability coverage, and how to choose coverages.
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Full Coverage Car Insurance vs Liability
Liability coverage pays for the other party’s property and injury damages in an at-fault incident. A full coverage policy includes liability, along with coverages for damages to your car.
| Coverages | Liability coverage | Full coverage |
|---|---|---|
| Bodily injury | Included | Included |
| Damage to the other car | Included | Included |
| Injury to passengers in the other car | Included | Included |
| Light poles | Included | Included |
| Property damage | Included | Included |
| Collision | Not included | Included |
| Comprehensive | Not included | Included |
| Damage to your car | Not included | Included |
| Your injuries | Not included | Included |
| Your passengers’ injuries | Not included | Included |
| Best for financed vehicles | No | Yes |
| Best for new cars | No | Yes |
| Best for vehicle owners | Yes | No1 |
What Is “Full Coverage” Auto Insurance?
Full coverage is made up of a few different types of coverage that protect your car, such as:
- Liability: Together, bodily injury coverage and property damage coverage make up liability coverage. Typically, liability coverage is legally required. Every state requires bodily injury coverage, except Florida and New Jersey, while every state requires property damage coverage. If you get into an at-fault accident, you’ll have to use liability coverage for the other party’s cost of damage and injuries.
NOTE
The only state that doesn’t require auto insurance at all is New Hampshire.
-
- Comprehensive and collision: Collision and comprehensive coverage are optional in all states, but we recommend them. Collision coverage covers damages to your vehicle in an at-fault accident, while comprehensive coverage covers damages from events other than collisions, such as theft, vandalism, and weather-related events like hail.
- Uninsured/underinsured motorist: Even in states where auto insurance is required, not everyone complies. If you get into an accident with a driver that lacks insurance or sufficient insurance, uninsured/underinsured motorist coverage will pay for your repairs. It also applies to hit-and-runs where you couldn’t get the other party’s insurance and contact information.
- Medical payments: Finally, in at-fault accidents, medical payments coverage (also known as personal injury protection) covers the cost of medical expenses and lost wages for you and your passengers.
Full coverage does not include every coverage available, however. It does not include:
- Roadside assistance
- Ridesharing (such as if you’re an Uber or Lyft driver)
- Rental car (when your vehicle is being repaired after an accident)
- Gap coverage
- Glass coverage
- Optional basic economic loss
Even so, you’re probably wondering how much full coverage auto insurance costs.
| Provider | Average annual cost of full coverage auto insurance |
|---|---|
| AAA | $3,014 |
| Allstate | $2,605 |
| Erie | $1,647 |
| Farmers | $2,979 |
| GEICO | $1,731 |
| Nationwide | $1,808 |
| Progressive | $1,960 |
| State Farm | $2,167 |
| USAA | $1,407 |
Of course, many factors affect the cost of car insurance, but on average, our research shows that the annual cost of full coverage insurance in 2025 is $2,399.
What Is Liability?
Liability insurance includes only property damage and bodily injury coverage. It does not include collision, comprehensive, uninsured/underinsured motorist, or medical coverage.
Key Differences
- Comprehensive coverage
- Collision coverage
- Uninsured/underinsured motorist coverage
- Medical payments coverage
- Full coverage costs more than liability coverage
Key Similarities
- Property damage coverage
- Bodily injury coverage
Which Is Better?
It’s a good idea to get full coverage insurance so that you can get your damages and medical costs paid for in covered claims. With full coverage, you can also be reimbursed for accidents with uninsured motorists, theft, vandalism, and hail. Liability insurance on its own applies only to the other party’s property damage and injuries, so you are personally responsible for any costs beyond your policy’s limits.
Which Is Required by Law?
Full coverage isn’t required; just recommended. In most states, only liability coverage is required as a minimum amount. Some states require medical coverage, while others require uninsured motorist coverage. No state requires collision or comprehensive coverage.
To see what level of auto insurance your state requires, read our auto insurance guide.
How Much Coverage Do I Need?
Ultimately, it’s your choice as to how much auto insurance coverage you need, but again, we recommend getting full coverage as a bare minimum. Then, you can add additional coverage amounts as you see fit. Set a deductible that you could pay if you had an at-fault accident tomorrow, and set your limits as high as the premium you can afford. Paying more now means paying less later, if you’re responsible for a car accident.
The Cost of Car Insurance
So what is the average cost of car insurance? In 2025, car insurance averages $2,399 for full coverage and $635 for minimum coverage. Your actual rate will depend on your provider, zip code, driving history, and other factors.
TIP
You can lower the cost of auto insurance by taking advantage of auto insurance discounts. Pay less by taking a defensive driving course, enrolling in automatic billing, or going paperless, among other things.
However, you may pay more for car insurance if any of the following apply to you:
- Have a history of at-fault accidents, tickets, or license suspensions or revocations
- Have a short driving history or no driving history at all
- Have poor credit (not all states consider this)
- Live in a city (rather than a rural or suburban area)
- Are under the age of 25
- Are male (men pay more for auto insurance than women in most states)
- Experienced a period of time in which you did not have insurance
- Drive an unsafe vehicle (like a vehicle with recalled parts) as determined by industry ratings
- Drive a lot of miles annually
- Have been convicted of DUI or have needed an SR-22
Recap
Even though full coverage may be more expensive than liability coverage, we think it’s still worth the savings in the long run and peace of mind. If you’ve ever visited a hospital or car repair shop, you know that injuries or car repairs can cost thousands of dollars. By purchasing full coverage, your insurance provider pays for damage to your vehicle and injuries to you and your passengers; that is, after you’ve paid the deductible.
Frequently Asked Questions
We’ve been flooded with questions about liability and full coverage. We’ve answered the most common questions below.
Is it better to have liability or full coverage?
Choosing full coverage is always the better option, if you can afford it. It includes comprehensive and collision coverage, which cover repairs for your car in the event of vandalism, theft, or natural disasters, or an at-fault accident. Since liability only covers the other party’s costs in an at-fault accident, you’d have to pay for repairs to your own car out-of-pocket.
Is liability the same as full coverage?
Liability is not the same as full coverage. Full coverage includes liability coverage (bodily injury and property damage), along with medical payments, uninsured/underinsured motorists, collision, and comprehensive coverage.
Is liability cheaper than full coverage?
Liability coverage is cheaper than full coverage because it includes only two coverages, not six coverages like full coverage.
When should I switch from full coverage to liability?
There’s no right time to switch from full coverage to liability. We recommend having full coverage so you can get your damages and injuries covered in an at-fault accident. Liability coverage covers only the other party’s injuries and damages, and does not include coverage for events like hail, flooding, theft, or vandalism.
Do I need full coverage if my car is paid off?
Even if your car is paid off, you still need full coverage to pay for its repairs along with injuries to you and your passengers. You’ll also want coverage if your car is stolen, vandalized, or damaged by weather events.
Senior Writer & Editor
A seasoned journalist and content strategist with over 10 years of editorial experience in digital media, Aliza Vigderman has written and edited hundreds of articles on the site, covering everything from plan coverages to discounts to state laws. Previously, she was a senior editor and industry analyst at the home and digital security website Security.org, previously called Security Baron. She has also contributed to The Huffington Post, SquareFoot, and Degreed. Aliza studied journalism at Brandeis University.
Citations
What Is the Difference Between Liability vs. Full Coverage Insurance?. United Auto Insurance.
https://www.unitedautoinsurance.com/what-is-the-difference-between-liability-vs-full-coverage-insurance/
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