Liability Coverage Only Pays for Injury and Damage to Others, While Full Coverage Includes Liability, Comprehensive and Collision To Keep You Protected Show
Understanding the difference between liability vs. full coverage car insurance can help you make the best decision for your budget and your vehicle. In this article, we at the Home Media reviews team will explain what the terms “liability” and “full coverage” mean when it comes to car insurance. We’ll also review the differences in coverage and cost between the two policy types. If you’re ready to purchase auto insurance, consider getting quotes from a few of the best car insurance companies on the market.
What Is the Difference Between Liability and Full Coverage?Liability car insurance only covers damages to other vehicles or injuries to other people when you’re driving. Full coverage insurance includes liability coverage along with other types of insurance to protect not only others, but also yourself on the road. Most states require a minimum amount of car insurance coverage, though it tends to be limited to liability only. On the other hand, a full coverage policy is usually optional. Full Coverage vs. Liability Car InsuranceThe table below highlights key differences between full coverage and liability auto insurance:
Full Coverage vs. Liability CostThe cost of your auto insurance policy is determined by a number of factors, including your age, vehicle, driving record, state, and city. Because a full coverage policy includes liability insurance, it is cheaper to purchase only liability vs. full coverage car insurance. And adding comprehensive and collision policies to your liability policy can be relatively inexpensive. Price Difference Between Full Coverage and LiabilityThe chart below shows average policy costs for minimum liability and full coverage insurance by state. These rate estimates are based on the driving profile of a 35-year-old married driver with a good credit score and clean driving record.
Liability vs. Full Coverage Insurance: In-depth AnalysisTo further underscore the differences between liability and full-coverage auto insurance, the sections below explain each coverage type in detail: What Is Liability Car Insurance?Liability car insurance is typically divided into two types of coverage: bodily injury liability and property damage liability. Both types of coverage pay for another driver’s expenses after an accident you are found at fault for.
Liability Car Insurance Coverage LimitsLiability car insurance policies do not cover an unlimited amount of damage. When you purchase liability car insurance, your policy will include coverage limits described by three numbers. For example, the minimum required liability car insurance in California is 15/30/5. These numbers represent the following:
Minimum requirements vary by state, but you can always purchase higher-limit policies than your state minimum. If your insurance policy fails to cover the full costs associated with an accident that you cause, you can be sued in civil court to make up the difference. What Is Full Coverage Insurance?“Full coverage” is a term used to describe a car insurance policy that includes liability coverage as well as comprehensive and collision coverage. A full coverage insurance policy might also include medical coverage and uninsured/underinsured motorist coverage (UM/UIM). Here’s what each of these types of insurance includes:
Full coverage car insurance is not required by law in any state. However, if you finance or lease your vehicle, your lender may require that you maintain full coverage car insurance as part of the lease/loan agreement. Do You Need Full Coverage Car Insurance?Liability auto insurance is required in most states, but full coverage insurance is not. While a full coverage policy is a good idea for many drivers, it’s not always worth it. Largely, whether you should purchase liability vs. full coverage depends on your finances and the value of your vehicle. Is Full Coverage Worth It?Full coverage car insurance is worth buying in many situations. When you include comprehensive and collision insurance policies, you cover the actual cash value of your car. That means that if your vehicle is totaled in a car accident, you’ll get roughly as much for it as if you sold it. This can protect you financially and offer peace of mind. Therefore, full coverage car insurance is probably worth it if you are in one of the following situations:
When Is Full Coverage Not Worth It?As your vehicle ages, its value drops. The general rule of thumb is that once your car is more than 10 years old, it is not worth purchasing full coverage insurance. To decide if you should purchase full coverage insurance, calculate the value of your vehicle and compare this amount against your expected premiums. A good tool for calculating your car’s value is Kelley Blue Book. If the amount you spend on your annual premiums isn’t much less than your car’s value, you may want to skip full coverage. Liability Auto Insurance vs. Full Coverage: ConclusionWhen deciding between liability insurance and full coverage car insurance, it’s important to consider how much protection you want for yourself, others and your vehicle. Purchasing liability insurance will only cover other vehicles and their injuries — not you or your car. Full coverage car insurance covers you, your vehicle and others involved in the accident. Full Coverage and Liability Car Insurance Companies: Top PicksWhatever your auto insurance needs, it’s a good idea to compare car insurance quotes from multiple providers before you purchase a policy. There is no single best insurer for every driver, so comparing liability vs. full coverage quotes from multiple options is the best way to find the lowest price. Geico: Editor’s ChoiceGeico boasts an A++ financial strength rating from AM Best, an A+ rating from the Better Business Bureau (BBB) and high rankings in multiple regions in the J.D. Power 2022 U.S. Auto Insurance Study℠. For these reasons and more, we think it is one of the best options out there. Geico policies are the most inexpensive option for many customers. This is partly due to Geico’s numerous car insurance discounts, which include a good driver discount (up to 26% off), multi-vehicle discount (up to 25% off) and good student discount (up to 15% off). You can purchase liability coverage from Geico as well as every other standard type of insurance (collision, comprehensive, personal injury protection, medical payments, uninsured/underinsured motorist). Additionally, Geico offers:
Keep reading: Geico insurance review Progressive: Low Rates for High-risk DriversProgressive is a good option for high-risk drivers (those who are under 21, are over 65 or have a DUI/DWI on record). Our cost research indicates that Progressive often offers the lowest rates for these types of drivers. Like Geico, Progressive has strong financial stability — the insurer is rated A+ for financial strength by AM Best. Minimum and full coverage insurance policies are available. In addition to the standard auto insurance options, Progressive offers policy add-ons for:
A useful feature offered by Progressive is the Name Your Price® tool, which allows customers to sort through coverage options by starting with the premium they hope to pay. Keep reading: Progressive insurance review Liability vs. Full Coverage: FAQOur MethodologyBecause consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list. Here are the factors our ratings take into account:
*Data accurate at time of publication. |