Comparing Liability vs. Full-Coverage Car Insurance
Liability car insurance only covers injuries or damage you cause to others in an accident. Full-coverage car insurance includes collision and comprehensive coverages along with liability, and so helps pay for your own vehicle damage after an accident as well.
What is the difference between liability-only and full-coverage car insurance?
Liability car insurance covers the injuries and damages of others in an accident you cause. Full-coverage car insurance covers the same, plus damage to your own vehicle after an accident.
Most states require their drivers to carry at least a minimum limit of liability car insurance. Full-coverage car insurance is not legally required by states. However, if you financed your vehicle, your lender will likely require you to carry full coverage for the duration of your loan or lease.
What does liability auto insurance cover?
Liability-only car insurance provides coverage for damages and injuries you’re at fault for in an accident. It includes:
- Bodily injury liability coverage: This coverage pays the injury-related expenses of others, like their hospital bills and lost wages, up to your policy limits. Also known as “minimum car insurance,” a liability auto insurance policy includes bodily injury limits for individuals and everyone injured in the accident.
- Property damage liability coverage: This coverage helps pay to repair or replace the damaged or destroyed property of others after an accident. If you damage another driver’s car or their home in an accident, for example, property damage liability will cover the costs up to your policy limit.
What does full-coverage car insurance cover?
Full-coverage car insurance usually combines liability coverage with comprehensive and collision coverages.
Comprehensive car insurance coverage pays for repairs to your car after it’s been damaged in a noncollision accident (such as a fallen tree branch), up to your policy limit. It also covers the replacement of your car if it is stolen.
However, comprehensive coverage doesn’t cover the theft of items in your car. For that, you need a homeowners insurance or renters insurance policy.
Collision car insurance coverage helps pay for repairs or replacement of your car after an accident, up to your policy limit. If collision coverage replaces your car after it’s totaled, you’ll be compensated up to the car’s current value adjusted for depreciation.
How much does liability and full-coverage car insurance cost?
The average cost of liability-only car insurance is $772 a year. Full-coverage car insurance costs an average of $1,970 a year.
Insurance companies consider different factors to calculate your car insurance quote. These factors include:
- Make and model of your car
- The ZIP code where your car is garaged
- Your personal insurance history
- Your age
- The limits and deductible you choose
Each state has different average rates based on these factors and their minimum liability requirements. South Dakota has the cheapest liability-only rate of $351 a year, on average, and Maine has the cheapest full-coverage rate of $1,100 a year.
Michigan has the most expensive average rate for both liability and full-coverage car insurance, at $1,849 a year for liability coverage and $4,638 a year for full coverage.
Liability and full-coverage rates by state
| State | Liability only | Full coverage |
|---|---|---|
| Alabama | $717 | $1,979 |
| Alaska | $605 | $1,532 |
| Arizona | $1,079 | $2,683 |
| Arkansas | $622 | $1,879 |
| California | $571 | $1,867 |
| Colorado | $897 | $2,542 |
| Connecticut | $1,088 | $2,346 |
| Delaware | $1,283 | $2,482 |
| Florida | $1,206 | $2,990 |
| Georgia | $790 | $1,832 |
| Hawaii | $609 | $1,643 |
| Idaho | $413 | $1,227 |
| Illinois | $848 | $2,109 |
| Indiana | $533 | $1,511 |
| Iowa | $444 | $1,663 |
| Kansas | $616 | $1,991 |
| Kentucky | $1,183 | $2,295 |
| Louisiana | $948 | $2,719 |
| Maine | $501 | $1,100 |
| Maryland | $1,093 | $2,051 |
| Massachusetts | $757 | $2,068 |
| Michigan | $1,849 | $4,638 |
| Minnesota | $743 | $1,884 |
| Mississippi | $662 | $1,796 |
| Missouri | $686 | $1,908 |
| Montana | $574 | $2,174 |
| Nebraska | $470 | $1,909 |
| Nevada | $1,368 | $2,958 |
| New Hampshire | $537 | $1,146 |
| New Jersey | $1,393 | $2,236 |
| New Mexico | $632 | $1,953 |
| New York | $1,059 | $2,030 |
| North Carolina | $532 | $1,305 |
| North Dakota | $522 | $1,858 |
| Ohio | $532 | $1,329 |
| Oklahoma | $656 | $2,119 |
| Oregon | $1,092 | $2,115 |
| Pennsylvania | $603 | $1,861 |
| Rhode Island | $1,213 | $2,636 |
| South Carolina | $803 | $1,808 |
| South Dakota | $351 | $2,016 |
| Tennessee | $505 | $1,554 |
| Texas | $696 | $1,833 |
| Utah | $989 | $2,261 |
| Vermont | $417 | $1,232 |
| Virginia | $715 | $1,598 |
| Washington | $651 | $1,534 |
| Washington DC | $949 | $2,082 |
| West Virginia | $659 | $1,701 |
| Wisconsin | $503 | $1,540 |
| Wyoming | $370 | $1,437 |
When looking at the largest auto insurance companies, State Farm has the cheapest average rates for most Americans. It charges $597 a year, on average, for liability car insurance and $1,487 a year for full-coverage car insurance.
USAA has the cheapest average rates overall, at $398 a year for liability coverage and $1,199 a year for full coverage. However, USAA only sells insurance products to active duty and veteran military members, as well as their families.
Liability and full-coverage rates by company
| Company | Liability only | Full coverage |
|---|---|---|
| Allstate | $1,158 | $2,609 |
| American Family | $728 | $1,920 |
| Farmers | $1,188 | $3,091 |
| Geico | $727 | $1,937 |
| Nationwide | $963 | $2,226 |
| Progressive | $791 | $2,032 |
| State Farm | $597 | $1,487 |
| Travelers | $835 | $1,919 |
| USAA* | $398 | $1,199 |
Auto insurance companies use different risk values when calculating your quote. For example, one company may think the age of your car is a bigger risk than another company, and quote a higher rate. This is one of the reasons you’ll see car insurance companies selling the same coverage with different premiums.
To get the best coverage for your situation at your best price, compare car insurance quotes from several different companies before you buy a policy.
Do I need liability-only or full-coverage auto insurance?
All states except New Hampshire require drivers to carry liability car insurance. However, if you decide to buy liability insurance in New Hampshire, you’ll need to buy at least the minimum limit set by the state.
No state requires full-coverage car insurance. But if you finance your car, your lender will probably require you to have full coverage for the extent of your finance agreement.
If you bought a new car, you should consider getting full-coverage car insurance. If you’re in an accident that totals the car and you have to pay to replace it out of pocket, you may have to spend tens of thousands of dollars to do it without full coverage.
On the other hand, a car’s value depreciates with age. If you have an old car and/or one with a lot of miles on it, the car may be worth less than what you’d pay for full-coverage car insurance or even the deductible.