Full Coverage Car Insurance vs Liability: What Are the Differences?

We are here to explain the difference between full coverage and liability.

Did you know that in every state, except Virginia and New Hampshire, it is illegal to drive a car without insurance? If you are a new driver, or you’re moving from either New Hampshire or Virginia to a state that now requires you to legally carry insurance, we are here to explain the difference between full coverage and liability. 

Read on to learn the ins and outs of full coverage car insurance vs liability. 

What Is Full Coverage Car Insurance?

Some people hear this term and think that it means the policy has all the bells and whistles, but it simply means that the policy has liability coverage plus collision and comprehensive coverage. In the event that you’re driving and your vehicle is damaged by either an object or another vehicle, your vehicle is covered with collision insurance, no matter who is at fault.

With comprehensive insurance if you’re in a non-collision incident, your repairs will be covered. For example, natural disasters, animals, theft, vandalism, falling objects, etc. would all be paid for by the insurance company if you have comprehensive insurance included in your policy.

Normally the insurance will pay for the damage to your car up to what its actual cash value is. You are only responsible for the deductible that you have chosen when you started your policy. Deductibles range between $250 up to $1,000+. 

Keep in mind that although full coverage is not required by law on a state level, if you finance your car or lease it, your lender will usually require full coverage in order to approve your loan. 

The price for full coverage depends on the location you live in. You can learn more about car insurance prices here. 

What Is Liability-Only Insurance?

When you have liability car insurance without collision and comprehension, only the cost of injuries and damage to others are covered, if you are at fault. This insurance will not cover any damage you cause to your own car or any injuries caused to yourself. 

There are 2 components that liability coverage is split into: property damage liability, and bodily injury liability. Property damage liability is the part of the policy that pays for damage to other vehicles or property in the event that you are at fault. 

Bodily injury liability covers the costs for injuries caused to someone else when you are found at fault during an accident. The amount covered will be limited by the limits you choose on your policy.  

The two figures usually shown are the maximum amount that will be paid for the entire accident and the maximum amount that is paid for each person’s injuries involved in the accident. 

Which Insurance Is Better to Carry?

For those that can’t afford to replace their car if it’s destroyed then it is best to consider carrying full coverage insurance. The older your car gets the lower its value will more than likely be. Adding full coverage to a car that is not worth that much is typically not a great deal because of the car’s value dropping every year. 

Normally when a car is between 8 and 12 years old and only worth around $5,000 to $10,000, dropping full coverage makes sense. Take a look at sites such as Kelly Blue Book to figure out around how much your car is currently worth to see if paying for full coverage is worth it or not. 

If you have enough money to replace your vehicle then opting for liability-only is probably best. 

Which Insurance Is Best for Who?

Full coverage is best for those that have cars that are less than 5 years old. Also, for people that own high-value name brand cars that cost more to replace, and if you can’t afford to pay for the cost of an accident if it were to happen. 

Liability only insurance is best for those with lower value cars that are 10 years or older. It’s also a good option for people that have enough money to pay for car repairs in the event of an accident. This is a good option for those that have a lot of miles on their car because if you are paying for full coverage on a car that has too many miles, you are more than likely paying too much. 

Coverage Amount

Every state has its own minimum insurance requirements, but when you opt to pay for increased coverage there are a few advantages. Opting for higher than the minimum coverage will give you extra protection if you were to be involved in an accident. 

You don’t always have to go for full coverage for extra protection, you can opt for add-on coverage to most liability-only policies. For example, you can add personal injury protection which will cover your injuries if you’re at fault. There is also the option to add uninsured/underinsured motorist coverage for a bit more protection without having to pay full coverage prices. 

Feeling Like a Full Coverage Car Insurance vs Liability Pro?

Now that you learned the differences between full coverage car insurance vs liability, you can make an informed decision on which type of coverage would be best for your needs and your car. If you still owe money on your vehicle then it is best to carry enough coverage to ensure that you are not left with no vehicle, but still owing money for it. 

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Robert Cooke
Rob is a certified mechanic and long-time automotive enthusiast who has worked on everyday passenger vehicles, race and rally cars, and derby cars.