Liability vs full coverage: Which do you need?

What’s the difference between liability and full coverage car insurance?

Liability car insurance is basic coverage that pays only for injuries and property damage you cause to others. It does not pay for damage to your own vehicle. Full coverage includes collision and comprehensive insurance, protecting both third parties and your own car.

Purchasing full coverage car insurance will cover you in more situations than liability alone, largely due to the addition of coverage for your car.

Liability-only vs. full coverage auto insurance: Key differences and costs
	Liability-only	Full coverage
What is covered?	Property damage Liability Bodily injury liability	Both types of liability Collision Comprehensive
Average annual cost	$486	$2,578
Is it mandated by law?	Yes, in every state except New Hampshire	No
Who is this policy best for?	People with older or lower-value cars People without a loan or lease and on a tight budget	Anyone with a loan or lease that requires it People with cars five or fewer years old People with expensive cars People who can’t afford to replace or repair their car

Read our methodology

What is liability car insurance?

Liability car insurance pays for injuries and damage to others when you’re financially responsible for an accident that’s your fault.

Each state requires a minimum amount of liability insurance coverage. The most common amounts for liability insurance are 25/50/25. That means $25,000 for bodily injury liability per person, $50,000 for bodily injury liability per accident, and $25,000 for property damage per accident. However, the amounts differ by state and range as low as $10,000 and as high as $100,000.

The state minimum is often too low to cover the cost of even a moderately serious accident. A 100/300/100 policy provides $100,000 per person, $300,000 per accident, and $100,000 in property damage, compared to the most common minimum of 25/50/25.

What is full coverage car insurance?

Full coverage includes collision and comprehensive insurance, as well as all coverages required by law in your state. Collision covers impact with another vehicle or object. Comprehensive covers theft, fire, vandalism, glass breakage, and animal impact. Optional coverages, including roadside assistance, rental reimbursement, and gap insurance, are available for an additional premium. A deductibleThe deductible is the amount you pay out of pocket for a covered loss when you file a claim. the insured selects applies; the insured pays that amount before the insurer pays out on a claimAn insurance claim is a request you make to your insurance company for coverage after your car is damaged or you have an accident. You can file a claim online, by phone, or in writing..

You aren’t obligated to have full coverage unless you have a loan or a lease on your vehicle. It’s required because it protects the lender’s financial stake in the vehicle.

Liability vs. full coverage: Auto insurance cost comparison

The difference between full coverage and liability-only varies by state. Based on Insurance.com rate data for a 40-year-old male driver with a clean record driving a 2023 Honda Accord LX, the smallest premium increase when going from 50/100/50 liability only to full coverage is in New York at 79%, and the largest is in Wyoming at 462%.

Auto insurance rates by state: Liability vs. full coverage costs and premium increases
State Name	50/100/50 liability only	100/300/100 ($500 ded) full coverage	$ Increase	% Increase
Alaska	$605	$2,167	$1,562	258%
Alabama	$610	$2,116	$1,506	247%
Arkansas	$753	$2,942	$2,189	291%
Arizona	$896	$2,420	$1,524	170%
California	$985	$3,444	$2,459	250%
Colorado	$753	$3,181	$2,428	322%
Connecticut	$1,130	$2,742	$1,612	143%
Washington, D.C.	$1,052	$3,465	$2,413	229%
Delaware	$1,449	$3,157	$1,708	118%
Florida	$1,635	$3,916	$2,281	140%
Georgia	$964	$2,503	$1,539	160%
Hawaii	$549	$1,757	$1,208	220%
Iowa	$523	$2,460	$1,937	370%
Idaho	$638	$1,901	$1,263	198%
Illinois	$579	$1,938	$1,359	235%
Indiana	$548	$1,894	$1,346	246%
Kansas	$781	$2,496	$1,715	220%
Kentucky	$778	$2,624	$1,846	237%
Louisiana	$1,338	$3,999	$2,661	199%
Massachusetts	$882	$2,429	$1,547	175%
Maryland	$929	$1,999	$1,070	115%
Maine	$478	$1,808	$1,330	278%
Michigan	$1,390	$3,964	$2,574	185%
Minnesota	$903	$2,591	$1,688	187%
Missouri	$616	$2,151	$1,535	249%
Mississippi	$701	$2,397	$1,696	242%
Montana	$570	$2,476	$1,906	334%
North Carolina	$681	$2,638	$1,957	287%
North Dakota	$608	$2,439	$1,831	301%
Nebraska	$585	$2,095	$1,510	258%
New Hampshire	$608	$1,689	$1,081	178%
New Jersey	$1,505	$3,122	$1,617	107%
New Mexico	$650	$2,577	$1,927	297%
Nevada	$1,414	$3,963	$2,549	180%
New York	$1,451	$2,596	$1,145	79%
Ohio	$513	$1,783	$1,270	248%
Oklahoma	$637	$2,993	$2,356	370%
Oregon	$922	$2,048	$1,126	122%
Pennsylvania	$603	$2,327	$1,724	286%
Rhode Island	$1,039	$2,878	$1,839	177%
South Carolina	$874	$2,417	$1,543	177%
South Dakota	$490	$2,575	$2,085	426%
Tennessee	$641	$2,235	$1,594	249%
Texas	$928	$3,106	$2,178	235%
Utah	$916	$2,356	$1,440	157%
Virginia	$706	$1,835	$1,129	160%
Vermont	$435	$1,660	$1,225	282%
Washington	$695	$2,389	$1,694	244%
Wisconsin	$680	$2,343	$1,663	245%
West Virginia	$720	$2,415	$1,695	235%
Wyoming	$367	$2,061	$1,694	462%

Read our methodology

When should you switch to liability-only car insurance?

Consider switching to liability-only car insurance if your vehicle is more than 10 years old or the annual cost of full coverage exceeds the vehicle's actual cash value. For most drivers with paid-off vehicles, liability-only becomes the better financial choice once a car's market value falls low enough that a collision or comprehensive payout would not justify the added premium.

Newer cars and those with a high value, such as exotics or high-performance cars, should have full coverage so the owner can recoup as much money as possible in the event of an accident. However, liability-only may be the better financial choice for an older car, especially one that’s paid off. Since an older car is worth less if totaled, it’s a trade-off worth considering.

So, should you get liability or full coverage insurance? It’s a personal financial choice if you don’t have a loan.

“It is up to the insured if they can afford it and do not mind paying for full coverage for peace of mind. The majority of people will drop down to liability after the vehicle is older than 10 years to avoid paying too much in auto insurance," says Lauren McKenzie, an insurance agent for A Plus Insurance in South Carolina. There is no specific time you can or should switch to liability-only car insurance. The answer usually depends on the age of your car.

Methodology

Insurance.com partners with Quadrant Information Services to field and analyze car insurance rates in all 50 states and Washington, D.C. National and state average rates are based on three coverage levels: state minimum, 50/100/50 liability-only, and full coverage with 100/300/100 liability and $500 deductibles.

Data is fielded based on a sample driver using these parameters:

40-year-old driver
Honda Accord LX
Good credit
A clean driving record
12-mile commute, 10,000 annual mileage

Learn more about our data and methodology.

FAQs

Does liability cover my car if someone else is at fault?

Liability car insurance does not cover damage to your own vehicle in any scenario. If someone else hits you and they carry liability insurance, their policy pays for your damage. If they are uninsured or underinsured and you carry only liability coverage, you have no coverage for your vehicle.

What happens if I only have liability and my car is totaled?

If you are at fault in an accident and carry only liability, your insurer pays for the other driver's repairs and medical bills, but your own car repairs come out of pocket.

If your car is totaled and you carry only liability, you receive nothing from your own insurer toward a replacement vehicle.