What Is the Difference Between Liability and Full Coverage Car Insurance

Liability car insurance is the most basic type of insurance, covering damages to other people's property or injuries to others in an accident. It usually includes bodily injury liability and property damage liability.

With liability insurance, you're only responsible for damages up to the policy's limits, which can leave you with significant out-of-pocket expenses. For example, if you're involved in an accident and the other person's car is totaled, you might be on the hook for the repair costs.

Full coverage car insurance, on the other hand, includes liability insurance as well as comprehensive and collision coverage. This means you're protected against damages to your own vehicle, regardless of who's at fault in an accident.

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Liability insurance is required in all states except New Hampshire, where you'll need to buy at least the minimum limit set by the state.

If you finance your car, your lender will likely require full coverage for the duration of your finance agreement.

Consider getting full-coverage insurance if you bought a new car, as you may have to pay tens of thousands of dollars to replace it without it.

Old cars with a lot of miles on them may be worth less than the cost of full-coverage insurance or even the deductible.

You should buy liability insurance if you're on a tight budget and have an old car with low value.

Keep in mind that no state requires full-coverage car insurance, but it's often a good idea to have it if you can afford it.

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Auto insurance coverage is a crucial aspect of car ownership. Liability-only car insurance provides coverage for damages and injuries you're at fault for in an accident.

Bodily injury liability coverage pays the injury-related expenses of others, like their hospital bills and lost wages, up to your policy limits. This is also known as "minimum car insurance."

Property damage liability coverage helps pay to repair or replace the damaged or destroyed property of others after an accident.

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In most states, you're required to carry liability car insurance, but if you finance your car, your lender will likely require full-coverage car insurance.

You should consider getting full-coverage car insurance if you bought a new car, as it will cover the cost of replacing the car if it's totaled in an accident.

Here are the key differences between liability-only and full-coverage car insurance:

If you have an old car 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. In this case, liability-only insurance might be a more cost-effective option.

The cost of car insurance can be a significant factor in your decision between liability and full coverage. The average cost of liability-only car insurance is $772 a year, while full-coverage car insurance costs an average of $1,970 a year.

Liability-only insurance is generally cheaper because it provides less financial protection. However, full coverage offers protection for your vehicle in addition to liability insurance, which can be a major consideration if you own a valuable car.

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The cost of car insurance can vary significantly depending on your location, with some states having much higher average rates than others. For example, 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.

Here's a comparison of the average annual costs of liability and full-coverage car insurance from several major insurance companies:

Liability-only insurance is nearly always cheaper than "full coverage" insurance because "full coverage" includes more coverages.

The difference in cost is significant, but it's worth considering the potential savings of "full coverage" insurance if you're involved in an accident where your vehicle is damaged.

Liability-only insurance will cost less in terms of premiums alone, but "full coverage" insurance can potentially save you a significant amount of money if you're ever in an accident.

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The cost of liability vs. full coverage car insurance can vary significantly. You can expect to pay around $772 a year for liability-only car insurance, while full-coverage car insurance costs an average of $1,970 a year.

The cost of liability-only car insurance can be as low as $351 a year in South Dakota, but as high as $1,849 a year in Michigan. Full-coverage car insurance costs can range from $1,100 a year in Maine to $4,638 a year in Michigan.

Some car insurance companies charge more for full-coverage car insurance than others. For example, Allstate charges $2,609 a year for full coverage, while State Farm charges $1,487 a year.

Here's a breakdown of the average costs for liability-only and full-coverage car insurance by state:

Keep in mind that these are just averages, and your actual cost may vary depending on your individual circumstances.

To determine how much car insurance you need, consider exceeding your state's minimum liability limits. This can provide better protection in case of an accident.

The amount of coverage you need is ultimately determined by your budget and situation. You can choose to increase your liability limits to a higher amount for a full-coverage car insurance policy.

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You can't choose the limit for comprehensive and collision coverage, which is determined by the car's actual value. This is a fixed amount that you'll have to work with.

Purchasing additional coverages like collision and comprehensive insurance can provide more comprehensive protection. This can give you peace of mind and financial security in case of an accident or other damage to your vehicle.

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Full coverage insurance covers the cost to repair or replace your vehicle if you damage it in an accident that's your fault, up to your policy's coverage limits. However, if you or your passengers suffer bodily injuries, full-coverage insurance alone wouldn't cover the medical bills and other associated costs unless you have personal injury protection (PIP) or medical payments coverage.

Liability-only car insurance provides coverage for damages and injuries you're at fault for in an accident. It includes bodily injury liability coverage, which pays the injury-related expenses of others, like their hospital bills and lost wages, up to your policy limits. Property damage liability coverage helps pay to repair or replace the damaged or destroyed property of others after an accident.

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Bodily injury liability insurance can help cover another party's medical expenses in a covered accident you cause. Insurance providers list their coverage limits in this format: 25/50/25, where the numbers represent thousands of dollars. Here's what each number indicates:

Comprehensive insurance covers damage caused by non-collisions, including theft, vandalism, fire, falling objects like hail, and hitting a deer.

Full coverage car insurance is a common term, but what does it actually cover? Full-coverage car insurance does cover the cost to repair or replace your vehicle if you damage it in an accident that is your fault. However, if you or your passengers suffer bodily injuries, full-coverage insurance alone wouldn’t cover the medical bills and other associated costs unless you have personal injury protection (PIP) or medical payments coverage.

Your liability insurance won’t cover the cost to repair or replace your car if it’s damaged in an accident. That said, if the other driver is at fault, their liability coverage would cover damages to your vehicle up to their policy’s limits.

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A "full coverage" policy might not cover bodily injury caused by an uninsured motorist. That’s why most insurance companies sell uninsured motorist (UM) and underinsured motorist (UIM) coverages.

Here are some things that aren’t covered by a standard full-coverage policy:

Full-coverage insurance also doesn’t cover expenses below your deductible or above your coverage limit.

Liability-only car insurance costs less than full coverage, but it only covers damages to other people's property and injuries, not your own vehicle.

If you're on a tight budget, liability-only might seem like a good option, but it's essential to consider whether you can afford to pay for repairs or replacement of your vehicle out of pocket.

Liability-only insurance typically doesn't cover damages to your own vehicle, which means you'll be responsible for paying for any repairs or replacement costs.

Here are some key differences between liability-only and full coverage insurance:

It's worth noting that you may be able to afford liability-only insurance, but if you get into an accident, you could end up paying a lot more than you expected.

If your car is totaled in an accident somebody else is at fault for, you should file a claim with their insurance provider.

The at-fault person's insurer is responsible for paying for the vehicle damage, so you won't have to pay out-of-pocket.

If you're at fault for the accident, you'll have to pay to replace your car out-of-pocket unless you have full coverage insurance, which includes collision coverage.

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If your car is totaled, you'll need to know who's responsible for paying for the damage. If the accident was caused by someone else, you should file a claim with their insurance provider.

The at-fault person's insurer is responsible for paying for the vehicle damage, not yours. This is an important thing to keep in mind if you're involved in an accident.

If you're at fault for the accident, you'll have to pay out-of-pocket to replace your car. Carrying "full coverage" insurance, which includes collision coverage, can help pay for damage to your own vehicle, regardless of who's at fault.

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Dropping full coverage can be a smart move in certain situations. You can drop full coverage once you've paid off your vehicle.

If repair costs are more than your car is worth, it might not be worth keeping full coverage. This is especially true if your driving history indicates you have a low claim-filing risk.

According to the National Association of Insurance Commissioners, repair costs can be a significant factor in deciding when to drop full coverage. In fact, the 2019/2020 Auto Insurance Database Report found that repair costs can exceed the value of a vehicle in many cases.

Here are some situations where dropping full coverage might make sense:

Keep in mind that if you drop full coverage, you'll need to pay all repair or replacement costs out of pocket. This can be a significant expense, so it's essential to carefully consider your options before making a decision.

Liability insurance can help cover the other driver's costs if you're at fault in a car accident. It doesn't cover your vehicle's damage, though.

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To get the most protection, you'll need to consider what you can afford to pay out of pocket for repairs if you're in an accident. This can help you decide between liability and full coverage.

Liability-only car insurance provides coverage for damages and injuries you're at fault for in an accident. This includes bodily injury liability coverage and property damage liability coverage.

Here's a breakdown of what liability insurance covers:

Liability insurance is often referred to as "minimum car insurance." It's essential to understand what it covers and what it doesn't to make an informed decision about your car insurance needs.