Key Takeaways
Car insurance is a mandatory requirement in most states. Every car owner requires minimum insurance coverage as mandated by the law in each state. One will come across the types of insurance coverage that can be opted for according to the need and driving history.
Here, we run an in-depth analysis of liability coverage and full coverage, when to opt for them, the cost, and the differences between the two types of coverage.
Having car insurance will protect you against any out-of-pocket expenses that might arise. In comparison, the term full coverage might seem slightly deceptive when we understand what it covers. In contrast, liability-only coverage may not be the best option based on the factors surrounding you.
Hence it is crucial to understand what the coverage means, its cost, the difference, and what suits your profile the best.
Liability car insurance is required by law in most states. This can be considered responsibility insurance that can protect you from violating the state's financial responsibility laws. In addition, if you cause an accident, this will help cover the other person's expenses.
The two kinds of liability insurance that insurance companies commonly offer are personal injury liability and property damage liability. You must get liability insurance to meet minimal requirements in 22 states. Drivers must also purchase either personal injury protection or uninsured motorist coverage to meet the minimum insurance requirements in 28 other states and Washington, D.C.
The amount of damage that liability auto insurance coverage will pay for is limited. Your liability auto insurance policy will include coverage limitations denoted by three numbers. In that order, these indicate the maximum amount paid for bodily injury liability per person per accident, bodily injury liability per accident, and property damage liability per accident.
For example, California has the minimum required liability as 15/30/5. This indicates
Full coverage insurance is collision and comprehensive coverage added to your liability coverage. The collision and comprehensive coverage added to your policy will protect your vehicle and injuries, not just the other driver's.
It must also be noted that comprehensive and full coverage is not the same. The addition of comprehensive coverage to your other coverages will classify your policy as a full coverage one. It will keep you financially secure in the case of accidents by avoiding out-of-pocket expenses.
Many full coverage policies offer additional options like gap insurance, rental reimbursement, and roadside assistance.
| Features | Liability Car Insurance | Full Coverage Insurance |
|---|---|---|
| Does the law require it? | Yes. Depends on the state. | No |
| What does it cover? | Property damage and personal injury for other drivers for an at-fault accident. | Expenses for the damage caused to your vehicle. |
| Deductible | Not required | Yes, between $500 and $1500. |
| Policy Limits | Chosen at the time of purchase. | Actual Cash Value of your vehicle. |
Since full coverage provides more financial security and better coverage for the damages that can occur while owning a car, the rates are higher. However, the average liability insurance is at least $419 less than the average full coverage premium.
South Dakota, Maine, and Wyoming have the cheapest liability premium rates, while Michigan has the highest. The lowest full coverage premium rates are in Maine, while the highest rates are found in Michigan.
| State | Average Liability Premium | Average Full Coverage Premium |
|---|---|---|
| Alabama | $478 | $1485 |
| Alaska | $431 | $1406 |
| Arizona | $676 | $1760 |
| Arkansas | $434 | $1531 |
| California | $633 | $2095 |
| Colorado | $581 | $1866 |
| Connecticut | $1509 | $2305 |
| Delaware | $947 | $2175 |
| Florida | $1349 | $2953 |
| Georgia | $679 | $1623 |
| Hawaii | $631 | $1825 |
| Idaho | $335 | $3,391 |
| Illinois | $533 | $1353 |
| Indiana | $434 | $1338 |
| Iowa | $289 | $1187 |
| Kansas | $506 | $1477 |
| Kentucky | $657 | $1785 |
| Louisiana | $938 | $2744 |
| Maine | $352 | $970 |
| Maryland | $978 | $1824 |
| Massachusetts | $879 | $2653 |
| Michigan | $1610 | $3791 |
| Minnesota | $611 | $1638 |
| Mississippi | $445 | $1440 |
| Missouri | $585 | $1740 |
| Montana | $461 | $1740 |
| Nebraska | $423 | $1628 |
| Nevada | $1021 | $2155 |
| New Hampshire | $465 | $1355 |
| New Jersey | $1038 | $2043 |
| New Mexico | $447 | $1455 |
| New York | $1478 | $2043 |
| North Carolina | $509 | $1644 |
| North Dakota | $383 | $1372 |
| Ohio | $353 | $1033 |
| Oklahoma | $449 | $1733 |
| Oregon | $742 | $1340 |
| Pennsylvania | $469 | $1653 |
| Rhode Island | $810 | $1854 |
| South Carolina | $632 | $1671 |
| South Dakota | $296 | $1658 |
| Tennessee | $421 | $1288 |
| Texas | $648 | $1758 |
| Utah | $687 | $1513 |
| Vermont | $286 | $1062 |
| Virginia | $496 | $1148 |
| Washington, D.C. | $584 | $1444 |
| West Virginia | $523 | $1543 |
| Wisconsin | $437 | $1225 |
| Wyoming | $313 | $1773 |
Apart from USAA, which offers insurance to active military personnel and veterans, State Farm and All State provide the cheapest rates for liability-only premiums. In contrast, State Farm and Progressive offer affordable rates for full coverage.
| Insurance Company | Full Coverage Premium Rate | Liability-Only Annual Premium |
|---|---|---|
| USAA | $823 | $496 |
| State Farm | $1120 | $806 |
| Progressive | $1232 | $894 |
| Allstate | $1237 | $874 |
| Nationwide | $1282 | $804 |
| Travelers | $1421 | $966 |
| Farmers | $1465 | $1001 |
| Met Life | $1619 | $1149 |
One major feature of any insurance is that it doesn't work in a one-size-fits-all mode. Understanding your requirement based on the type of car you own, your credit score, financial stability, and driving history is crucial to have your car insurance work for you.
While too little coverage can expose you financially during an accident and related expenses, too much coverage can stress your budget financially. So, one should keep a check and balance on what kind of coverage they need by analyzing the influencing factors.
You require full coverage on your car if you have loaned or leased your vehicle. However, if you have purchased it, you can weigh your option between full coverage and liability coverage. You will need full coverage on your car under the following situations.
If your car is more than ten years old, it can be more feasible to obtain liability-only insurance due to depreciation. Once your car gets old, you might drop the full coverage on your car.
Liability insurance is mandatory to keep up with the financial responsibility laws of each state. While it may not give absolute financial protection, there are certain situations where having liability insurance is enough. For example, you can maintain liability insurance under the following situations.
Since car insurance is mandatory, either of the coverage is a must. It is advisable to weigh the potential factors that influence the coverage costs. It is crucial to always consider your car's depreciated value and the premium's annual cost before finalizing the coverage type.
Way.com simplifies otherwise tedious car insurance shopping. Get a free vehicle insurance quote in minutes by downloading the Way.com app or visiting the website.
The auto insurance rates published in this guide are based on the results of research completed by Way.com’s data team. Using a mix of public and internal data, we analyzed millions of rate averages across U.S. ZIP codes.
Quotes are typically based on a full coverage policy average unless otherwise noted within the content.
These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes will differ. Given this, it’s important to go through our insurance steps form to find how much you can save with way.com
Way.com’s Insurance Broker Quote Data
You must have full coverage if you've financed your car through a loan or lease. However, if you bought it somewhere else, you can always choose between liability coverage and full coverage.
Full coverage is worth it when your car is new or less than ten years old if you own a leased or luxury car. In such cases, full coverage will keep you financially secure in the case of accidents by avoiding out-of-pocket expenses.
Full coverage is not encouraged when your car is old or has plenty of mileage. This is because the premium rates for cars with more mileage are lower.
Yes, full coverage covers damages caused in at-fault accidents.
You can understand your policy type and status by reviewing the insurance declaration page.
Liability insurance does not give coverage if a non-collision-related occurrence results in the damage (or if you were at fault); thus, you will be responsible for covering all costs. The policy of the other driver can cover the cost of damages.
Since liability-only insurance covers the state-mandated minimum, it costs $419 less than full coverage.
Access your digital insurance card through the app. You no longer need to carry your physical insurance card with you.
Receive reminders before your renewal. Way.com will also send new quotes from up to 45 insurance companies with your renewal reminder.
Keep everyone on your policy up to date by sharing your insurance information.
Make changes to your policy right from the app (coming soon) and ask for expert advice.
For the best user experience, please download our Way app.
or
Free quotes from 150+ carriers in seconds
