Liability vs. Full Coverage Car Insurance

Liability-only car insurance pays for other people’s injuries and property damages when you are responsible for a car accident. At an additional cost, full coverage insurance expands your coverage to include your own losses from car accidents, theft, vandalism and more.

Only liability coverage is required by law in most states but full coverage may be necessary if you have a car loan or lease. Find out which coverage works best for your car, budget and coverage needs.

Liability Insurance vs. Full Coverage: Key Differences

 

Liability

Full Coverage

Coverage

Property damage liability

Bodily injury liability

Collision

Comprehensive

Property damage liability

Bodily injury liability

Legally Required

Most states

No state requirement

Likely required if you are financing or leasing your car

Average Annual Cost

$650.35

$1,203.65

Deductible

No deductible

Yes

Liability vs. Full Coverage: Cost by State

According to 2019 data from the National Association of Insurance Commissioners, the national average annual cost of minimum liability car insurance is $650.35. Full coverage insurance costs, on average, $1,203.65 annually — an 85% increase.

liability versus full coverage average annual cost comparison bar graph chart

However, actual costs can vary significantly by state with full coverage auto insurance ranging from 51% more to nearly triple the cost of liability coverage. Each state sets their own minimum liability car insurance requirements, which contributes to varying car insurance costs by region. Additional coverages, like uninsured motorist coverage or personal injury protection, that are required in certain states can add to costs, as well.

Only liability coverage is required by law but full coverage may be necessary if you have a car loan or lease.

Discover the average cost of liability versus full coverage insurance in your state below.

State

Average Liability Annual Rate

Full Coverage Rate

% Increase

Countrywide

$650.35

$1,203.65

85%

Alabama

$527.20

$1,097.51

108%

Alaska

$584.90

$1,141.88

95%

Arizona

$662.55

$1,198.79

81%

Arkansas

$484.37

$1,097.56

127%

California

$627.77

$1,219.48

94%

Colorado

$704.82

$1,335.08

89%

Connecticut

$799.45

$1,346.25

68%

Delaware

$897.87

$1,388.95

55%

District of Columbia

$819.36

$1,580.78

93%

Florida

$997.20

$1,505.90

51%

Georgia

$829.86

$1,430.83

72%

Hawaii

$478.83

$955.65

100%

Idaho

$433.66

$846.91

95%

Illinois

$521.11

$1,017.02

95%

Indiana

$444.98

$872.81

96%

Iowa

$350.31

$822.99

135%

Kansas

$426.14

$998.54

134%

Kentucky

$609.98

$1,086.00

78%

Louisiana

$1,023.91

$1,761.25

72%

Maine

$375.40

$788.26

110%

Maryland

$749.18

$1,347.39

80%

Massachusetts

$664.92

$1,261.84

90%

Michigan

$979.47

$1,620.01

65%

Minnesota

$502.32

$991.07

97%

Mississippi

$544.43

$1,148.01

111%

Missouri

$527.59

$1,069.97

103%

Montana

$437.69

$1,036.98

137%

Nebraska

$431.71

$973.87

126%

Nevada

$925.71

$1,419.49

53%

New Hampshire

$442.52

$897.15

103%

New Jersey

$958.31

$1,510.58

58%

New Mexico

$584.25

$1,122.56

92%

New York

$932.46

$1,575.13

69%

North Carolina

$392.06

$874.53

123%

North Dakota

$312.30

$861.37

176%

Ohio

$447.86

$882.78

97%

Oklahoma

$504.79

$1,113.84

121%

Oregon

$684.81

$1,076.26

57%

Pennsylvania

$548.58

$1,102.76

101%

Rhode Island

$918.30

$1,550.52

69%

South Carolina

$715.26

$1,244.51

74%

South Dakota

$337.11

$932.81

177%

Tennessee

$479.43

$1,000.92

109%

Texas

$650.17

$1,370.19

111%

Utah

$615.15

$1,050.70

71%

Vermont

$374.06

$856.32

129%

Virginia

$491.51

$964.69

96%

Washington

$705.11

$1,151.62

63%

West Virginia

$515.20

$1,093.67

112%

Wisconsin

$421.21

$840.47

100%

Wyoming

$356.08

$983.49

176%

Source: National Association of Insurance Commissioners

The national average annual cost of minimum liability car insurance is $650.35.

Liability Coverage Overview

Liability coverage provides two types of liability protection when you are responsible for a car accident:

  • Bodily injury liability: Pays for the medical expenses, loss of income and funeral costs of injured or deceased parties, including other drivers and pedestrians.
  • Property damage liability: Pays for the damages of the other victims, such as car repair bills.

Liability coverage will also cover your legal expenses if the victims of a car accident sue you for compensation.

Only the losses of other people are covered by liability insurance and will never cover your injuries or property damages. To gain these protections, you will need to buy medical payments coverage and collision coverage.

Not Covered Under Liability-Only Coverage

Liability insurance will not cover you for the following types of losses:

  • Damages to your car or your car
  • Your car is stolen
  • Injuries you or your passengers suffer after an accident (covered under Medpay)
  • Driving for a rideshare company, such as Uber or Lyft
  • Driving for a delivery service, like Uber Eats
  • Street racing
  • Typical wear and tear
  • Custom equipment/modified parts
  • Destruction by law enforcement
Find the Right Auto Insurance Coverage for Your Needs

Full Coverage Overview

Full coverage meets your state’s minimum insurance requirements plus provides comprehensive and collision coverage. These additional protections cover you when your car collides with another car or object or for losses unrelated to a collision, like theft or fire damage, even when the accident is your fault.

There is no state law requiring drivers to carry full coverage. However, If you are financing or leasing your car, then your lender will likely require you to maintain full coverage until you fully repay the auto loan.

Comprehensive coverage will pay for your losses if it was caused by an incident other than a collision. Covered losses will generally include:

  • Theft
  • Vandalism
  • Falling trees and other such objects
  • Natural disasters (e.g., storms, hail, floods, earthquakes, fire)
  • Windshield and glass damage

Collision coverage pays for your damages when your car strikes another vehicle or object, like a tree or telephone pole. Recall that liability coverage covers only other people’s losses when you can be held liable. Collision coverage ensures that you have some coverage for your own losses. Below are examples of claims that would be covered with collision coverage:

  • Single-car accidents involving only your car
  • Striking an animal, like a deer
  • Auto accidents with other vehicles
  • Striking stationary objects (e.g., trees, guardrails, telephone poles, posts, guardrails, houses, garages, mailboxes)
  • Single-car rollover

Full coverage insurance costs, on average, $1,203.65 annually.

Not Covered Under Full Coverage

  • Off-road driving
  • Driving for a rideshare company, such as Uber or Lyft
  • Driving for a delivery service, like Uber Eats
  • Street racing
  • Typical wear and tear
  • Custom equipment/modified parts
  • Destruction by law enforcement

Is Liability Coverage Required?

Minimum liability coverage is required in all states except New Hampshire and Virginia. New Hampshire does not require car insurance and Virginia drivers can pay a $500 fee to opt out of carrying car insurance.

Use our table below to find your state’s minimum liability requirements. Keep in mind states may enforce additional insurance coverages, like uninsured motorist coverage and personal injury protection.

State

Requirement

State

Requirement

Alabama

25/50/25

Montana

25/50/20

Alaska

50/100/25

Nebraska

25/50/25

Arizona

25/50/15

Nevada

25/50/20

Arkansas

25/50/25

New Hampshire**

25/50/25

California

15/30/5

New Jersey

15/30/5

Colorado

25/50/15

New Mexico

25/50/10

Connecticut

25/50/25

New York

25/50/10

Delaware

25/50/10

North Carolina

30/6025

Florida

–/–/10

North Dakota

25/50/25

Georgia

25/50/25

Ohio

25/50/25

Hawaii

20/40/10

Oklahoma

25/50/25

Idaho

25/50/15

Oregon

25/50/20

Illinois

25/50/20

Pennsylvania

15/30/5

Indiana

25/50/25

Rhode Island

25/50/25

Iowa

20/40/15

South Carolina

25/50/25

Kansas

25/50/25

South Dakota

25/50/25

Kentucky

25/50/25

Tennessee

25/50/15

Louisiana

15/30/25

Texas

30/60/25

Maine

50/100/25

Utah

25/65/15

Maryland

30/60/15

Vermont

25/50/10

Massachusetts

20/40/5

Virginia

30/60/20

Michigan

50/100/10

Washington

25/50/10

Minnesota

30/60/10

West Virginia

25/50/25

Mississippi

25/50/25

Wisconsin

25/50/10

Missouri

25/50/10

Wyoming

25/50/20

Full Coverage vs. Liability: Which Is Better?

The value of full coverage versus liability coverage will depend on the value of your car after depreciation and how quickly you pay off your car loan.

If you are financing your car, then your lender will likely require you to maintain full coverage (and sometimes gap insurance) until you repay the loan. You have the option to drop full coverage after you fully repay your loan.

Drivers often remove full coverage from their policy when their car’s value drops to only a few thousand dollars. Assuming you paid off your car loan, the general rule of thumb is to drop full coverage when your car hits five years old or 100,000 miles.

The cost of your specific car model’s repair and replacement parts are another consideration. For example, luxury brands may have high repair costs due to expensive replacement parts. When expected repair costs far exceed your deductible, then it may be worth maintaining full coverage for longer.

Liability-only coverage is generally a better option if you want to pay a cheaper premium, don’t mind fewer coverages and your car’s value dropped significantly due to depreciation.  However, dropping full coverage means you’d have to pay out of pocket for collision- and comprehensive-type claims.

The general rule of thumb is to drop full coverage when your car hits five years old or 100,000 miles.

Consider Dropping Just One Type of Coverage

Don’t think that comprehensive and collision coverage are always bundled — you can drop one and keep the other. If you’re a safe driver with a clean driving record, collision coverage may not be absolutely necessary. Comprehensive coverage may not be crucial to have if your car is garaged and you live in a safe neighborhood where theft and vandalism are rare.

FAQs

How much liability coverage do I need?

Liability minimum requirements will vary by state and can range from $15,000 to $50,000 per person and $30,000 to $100,000 per accident for bodily injury liability. Property damage liability limits can range from 5,000 to $2,500 per accident.

Should I drop full coverage on my car?

If you finished paying off your car loan, and your car is five years old or has over 100,000 miles, you may want to drop full-coverage. However, this is only a general guideline and the answer can vary based on the type of car you have and its replacement or repair costs.

What happens if my car is totaled with only liability coverage?

If you are the at-fault driver in the car accident or it was a single-car accident (e.g. vehicle rollover) and your car was totaled, then you will likely be responsible for the full cost of replacing your vehicle. Liability coverage only covers the other person’s losses if you can be held responsible.

Key Takeaways

  • The national average annual cost for liability coverage auto insurance is $650.35 and $1,203.65 for full coverage.
  • Liability coverage covers only other people’s losses when you are the at-fault driver in a car accident.
  • Full coverage includes collision coverage and comprehensive coverage, which covers your losses when you are the at-fault driver or if they were caused by falling branches, fire or some other non-collision event.
  • The cost of full coverage becomes less worth it over time due to depreciation, typically when your car hits five years old or 100,000 miles.

SmartFinancial makes it easy to find a liability or full coverage car insurance policy. Shopping around gets tedious when you need to contact insurance companies one by one for a quote. With SmartFinancial, you complete one questionnaire about your coverage and budget needs and we match you with the perfect auto policy. Just enter your zip code below or call 855.214.2291 to receive your free car insurance quotes.

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