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Published: February 2, 2022Last updated: October 18, 2022

Full Coverage Auto Insurance vs. Liability Insurance

When it comes to auto insurance, which one is better?

When you’re buying auto insurance, you may not be exactly sure what some coverages may cover. How much auto insurance do you need, and how can you make sure you’re not getting swindled into buying unnecessary and expensive coverages? We’ll explain the difference between full coverage and liability coverage, and which one is right for you.

Full Coverage Car Insurance vs Liability

In a rush? See the differences and similarities between liability and full coverage in our handy chart below. Or, read on for more details.

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 actually 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.

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The only states that don’t require auto insurance at all are New Hampshire and Virginia.

  • Comprehensive and collision: Collision and comprehensive coverage are optional in all states, but we recommend them. Collision coverage will cover 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.

Insurance Claim Form

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.

Type of vehicle Average annual cost of full coverage auto insurance
Small sedan $1,342
Large sedan $1,264
Medium sedan $1,245
Half-ton/crew pickup (4WD) $1,242
Electric vehicle $1,227
Hybrid vehicle $1,212
Mid-size SUV (4WD) $1,118
Minivan $1,096
Small SUV (FWD) $1,087

Of course, many factors affect the cost of car insurance, but on average, the annual cost of full coverage insurance in 2020 was $1,202.2

What Is Liability?

Liability 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 and so you can 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 on 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 2019, the last year federal data is available, the average expenditure in the U.S. was ​​$1,070.47. The median by state, on the other hand, was $9403

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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 applies 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 take this into consideration)
  • 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 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.

Citations

  1. What Is The Difference Between Liability vs. Full Coverage Insurance? United Auto Insurance. (2022).
    https://www.unitedautoinsurance.com/what-is-the-difference-between-liability-vs-full-coverage-insurance/

  2. How Much Does it Really Cost to Own a New Car? AAA Newsroom. (2020).
    https://newsroom.aaa.com/wp-content/uploads/2020/12/2020-Your-Driving-Costs-Brochure-Interactive-FINAL-12-9-20.pdf

  3. 2018/2019 Auto Insurance Database Report. National Association of insurance Commissioners. (2022).
    https://content.naic.org/sites/default/files/publication-aut-pb-auto-insurance-database.pdf