Liability vs. full coverage insurance: What's the difference?

Liability-only insurance is usually cheaper than full coverage, but unlike full coverage it doesn't cover all types of damage to your car.

Anna SwartzAndrew Hurst

By

Anna Swartz

Anna Swartz

Managing Editor & Auto Insurance Expert

Anna Swartz is a managing editor and auto insurance expert at Policygenius, where she oversees our car insurance coverage. Previously, she was a senior staff writer at Mic.com, as well as an associate writer at The Dodo.

&Andrew Hurst

Andrew Hurst

Senior Editor & Licensed Auto Insurance Expert

Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

Updated|6 min read

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If you're shopping for a car insurance policy, you'll have to decide between getting just liability insurance or what’s usually called full coverage, which just means a policy that includes comprehensive and collision coverage. While liability insurance only pays for the injuries and property damage you cause to others, a full coverage policy also covers damage to your own car, even if you're responsible.

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Liability-only insurance is usually cheaper than full coverage, and the cheapest liability-only insurance is a policy that just has enough coverage to meet the minimum car insurance requirements in your state. But getting just your state minimums can leave you seriously unprotected after an accident.

Key takeaways

  • Liability-only car insurance offers less protection than a full coverage policy.

  • Full-coverage auto insurance refers to a policy that has comprehensive and collision coverage and covers damage to your own car.

  • Liability coverage is cheaper than full coverage, but carrying only liability insurance means you could have to pay to replace your own car if it’s stolen or damaged.

  • When you're deciding on liability vs. full coverage insurance, consider how much it would cost you to to replace your car yourself— though you'll need full coverage anyway if you have a loan or lease.

Liability vs full coverage: what's the difference?

The following table displays a few of the main differences between liability and full coverage car insurance. We also break down the differences between liability and full coverage more fully below.

Level of CoverageLiabilityFull Coverage
Who it coversOther driversOther drivers and you
What it includesBodily injury and property damage liability coverageCollision and comprehensive coverge
Required?Yes, in almost every stateNo, unless you lease or have a loan on your car

Full coverage car insurance includes collision and comprehensive coverage, meaning it covers the cost of damage to your own car, whether it’s from an accident or another incident. Since liability coverage only protects others from the damage that you're responsible for, if you have a liability-only policy, you won’t be covered if your car is stolen, vandalized, or damaged in an accident you cause.

Almost every state requires you to carry a bare minimum amount of liability insurance before you can drive legally. However, you can get more than the minimum amount of liability insurance and still not be fully covered for damage that you cause to your own car.

Unlike liability insurance, full-coverage car insurance isn’t required by law at all. But your lender or lessor will probably require you to have full coverage if you have an auto loan or lease your vehicle.

→ Read more about how exactly car insurance works

How much is full coverage compared to liability?

Full coverage car insurance is typically more expensive than liability-only insurance because it comes with more protection. And the cheapest car insurance policy is one that only meets the minimum coverage requirements in your state — but that’s also the policy that leaves you the least protected. 

We found that full coverage costs $1,183 more per year on average than a policy with just the minimum amount of liability insurance required in each state. This is an increase of 192%.

InsurerMinimum coverageFull coverageDifference
USAA$369$1,128$759
State Farm$475$1,240$765
GEICO$402$1,179$777
American Family$676$1,515$839
Auto-Owners Insurance$327$1,209$882
Travelers$683$1,586$903
Nationwide$624$1,569$945
Farm Bureau Insurance$478$1,519$1,041
Progressive$737$1,814$1,077
Farmers$781$1,968$1,187
Allstate$750$1,991$1,241
MetLife$888$2,450$1,562

Table is ordered by the dollar-amount increase from minimum to full coverage.

While full coverage is more expensive on average than liability insurance, the cost of coverage varies depending on the company and your location. 

No matter whether you have a liability-only or full coverage policy, we recommend settling liability limits of at least 100/300/100, meaning up to $100,000 in bodily injury liability coverage per person, $300,000 in bodily injury liability coverage per accident, and $100,000 in property damage liability coverage. 

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What is liability-only insurance?

A liability-only insurance policy just covers the damage or injury that you cause to other drivers. If you cause a crash, injure another driver and damage their car, they would make a claim with your liability insurance — also called a third-party claim. Since liability insurance is not full coverage and only covers damage that you cause to others, you would have to pay for your own car's repair costs yourself.

There are two parts of liability insurance: 

  • Bodily injury liability coverage pays for the injuries that you cause to another person in a car accident.

  • Property damage liability pays for repairing or replacing another person's property if you damage it in a car accident.

If someone else causes an accident, their bodily injury or property damage liability (together called liability BIPD) would cover you. However, if you were hit by someone without enough insurance to cover the damage they cause, you would need uninsured and uninsured motorist protection in order to be covered.

→ Read more about what liability insurance is and how it works

How do you know how much liability coverage you have? 

Insurance companies usually show your coverage amounts using slashes. For example, your policy might show your liability coverage as 25,000/50,000/25,000. 

The first number means that your insurer will cover the cost of another individual's injuries for up to $25,000. For the entire accident, your company will pay up to $50,000. The third number is your policy's amount of property damage liability coverage.

Let's say that you cause an accident that injures another driver and their two passengers. The driver's injuries cost $25,000, while the rest of the injuries carry bills for $40,000. Since you have $25,000 of liability coverage, the driver's injuries are covered. But, you also caused a total of $65,000 worth of injuries between all three people. Because you're only insured for $50,000 you would still have to pay $15,000 yourself.

What is full coverage?

Full coverage auto insurance is different from liability-only insurance. Unlike liability-only insurance, there is no "full coverage" product that you can buy. Instead, a full coverage policy is just one that includes comprehensive and collision coverage in addition to liability.

Comprehensive and collision coverage pay for damage that's not caused by another driver. 

  • Comprehensive covers damage from a non-driver, like an animal, a vandal, or the weather. 

  • Collision covers damage that you cause, like in a single-car crash or in an at-fault accident with another driver.

To increase the protection of your car insurance even more, you can buy other types of coverage that your state doesn't require, like roadside assistance or rental car reimbursement coverage. However, these extra coverage add-ons, called endorsements, aren't usually considered part of a typical full coverage policy. 

→ Read more about the differences between comprehensive and collision coverage

Is comprehensive the same thing as full coverage?

You may have heard comprehensive used interchangeably with full coverage. However, they're not exactly the same thing. Comprehensive coverage, along with collision coverage, is a part of what's typically considered a full coverage policy.

Unlike liability insurance, you have to pay a deductible to use comprehensive and collision coverage. The insurer subtracts your deductible amount (which you select when buying coverage) from your settlement amount if your claim is successful. 

Should you get full coverage or liability coverage?

Bottom line: Full coverage, which includes comprehensive and collision coverage is worth it for most people.

As long as you can afford it, full coverage is typically worth the investment. Even though full coverage is usually more expensive than liability insurance, increasing the cost of your insurance premium by adding comprehensive and collision coverage is much cheaper than having to buy a new car if you total it — or if it's stolen or vandalized.

And if you lease or finance a car, you’ll be required to have both comprehensive and collision (and sometimes also gap insurance). That’s because you’re not your car’s only owner, and your lessor or lender wants to protect their investment.

If you want full coverage insurance but aren't sure if you already have it, check your policy's declarations page. This page lists exactly what types of coverage you have, including your liability limits and any extras. If you don't have full coverage but want it, Policygenius can help you shop insurers and get the best rates for the amount of coverage you want.

When wouldn't you need full coverage car insurance?

If you drive an old car and you don’t care about replacing it if it's totaled, then you can skip full coverage. And you can skip full coverage on one car and not the other: Say you have a brand new sedan you drive to work, you’ll want full coverage on that car, but you can skip it for the old clunker your teen is using while they learn to drive.

Generally, if your car is worth less than your premiums after adding comprehensive and collision coverage, you don't need full coverage. It also wouldn't be worth adding full coverage if your deductible amount is close to the value of your car. In these cases, it might just be cheaper to replace your damaged or stolen car.

→ Read more about when you might not need full coverage insurance

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Frequently Asked Questions

What is basic liability insurance?

Basic liability insurance is the amount of liability coverage that your state requires. This varies depending on where you live, and could be as high as $25,000/$50,000/$25,000 in some states. There are even two states — New Hampshire, and Virginia — that don't require you to carry any car insurance at all (although you must meet minimum coverage levels if you choose to buy insurance in those states).

What is the difference between general liability and auto liability?

General liability insurance is a type of business insurance that covers injuries or legal costs involving customers. Like auto liability, it only covers costs that you're responsible for — not costs related to your own injuries or products. However, since general liability is a form of business insurance and not a type of personal auto coverage, there are few other similarities.

Is PLPD the same thing as full coverage?

PLPD stands for personal liability and property damage, another way of referring to the bodily injury and property damage coverage that comes with regular liability insurance. Since PLPD is another name for liability insurance, it's not the same thing as a full coverage policy.