No matter how cautious you try to be, accidents happen, and the purpose of car insurance is to protect you financially in case you’re involved in one. There are many options for coverage, limits, and deductibles. Maybe you just need the state minimum liability insurance, or maybe you’d like the extra protection that full coverage insurance gives you.
When you're ready to get set up with car insurance, a local independent insurance agent can help you. They'll work with you to build a policy that includes the right coverage for your unique vehicle and needs. But first, here's a guide to liability insurance vs. full coverage insurance to help you understand the differences.
Key Takeaways - Liability vs. Full Coverage Car Insurance: 2026
Liability coverage, or minimum coverage, is required in 49 states and only provides protection for the cost of damage and injuries to third parties after you're at fault in an accident.
Full coverage car insurance typically refers to an auto policy with liability, collision, and comprehensive coverage, which includes physical damage protection for your vehicle.
The national average cost of liability coverage is $703 per year, or about $59 per month.
The national average cost of full coverage is $2,058 per year, or about $172 per month.
Working with a local independent insurance agent is strongly recommended, as they can evaluate your car insurance needs and shop and compare quotes for full coverage and liability coverage from multiple carriers near you to find the best deal.
Liability vs. Full Coverage Insurance at a Glance
In a nutshell, liability insurance covers damage to other vehicles or injuries to third parties only if you’re at fault in an accident. Full coverage insurance includes liability but also covers damage to your vehicle, even if it’s not from a collision. Full coverage policies include comprehensive coverage and collision coverage.
The main difference between liability and full coverage is this: With liability insurance, if you’re in an accident, repairs are only covered for the car you hit, not for your car. But with full coverage, both vehicles are covered for repairs. An independent insurance agent can help you choose between full coverage vs. liability insurance for your auto policy.
Liability Insurance vs. Full Coverage Side-by-Side Comparison
| Factor | Liability Coverage | Full Coverage |
|---|---|---|
| What's Included |
Property damage liability
Bodily injury liability
|
Collision
Comprehensive
Property damage liability
Bodily injury liability
May also include personal injury protection (PIP)
Medical payments coverage (MedPay)
Uninsured/underinsured motorist insurance
|
| Average Annual Cost | $703 ($59 per month) | $2,058 ($172 per month) |
| Is It Required? | Yes, in most states | Yes, if you lease or finance a car |
| Deductible | No | Yes |
| Best For | If you only want minimum coverage, or your car is older or less valuable | If you can afford full coverage and want maximum protection, or drive a newer, more valuable vehicle |
If you cause an accident, liability insurance covers the costs for injuries to the driver of the other vehicle and their passengers, plus the damage to their car or other property up to the limits of your policy. But a liability-only policy does not provide coverage if you or your passengers are injured or if your car is damaged.
A full coverage policy includes liability insurance, as well as comprehensive and collision coverage, which helps pay for damage to your car. It also covers theft and vandalism. Different states have different minimum requirements, which can include:
- Bodily injury liability insurance
- Property damage liability insurance
- Uninsured/underinsured motorist insurance for bodily injury
- Uninsured/underinsured motorist insurance for property damage
- Personal injury protection or medical payments coverage
While full coverage insurance is not required in any state, if you lease a car or buy one with bank financing, you may be required by the lender to have a full coverage policy.
What Is Liability Car Insurance?
Liability insurance covers the costs associated with claims for bodily injury or property damage. Without it, if you cause an accident and injure someone else or damage their property, whether it’s a vehicle, fence, or something else, you could be sued. Liability insurance protects you from these costs. Additionally, liability car insurance is required in 49 states, with New Hampshire being the only exception currently.
What liability insurance covers
Liability-only car insurance covers the following:
- Bodily injury: Pays for injuries to other people in accidents that you cause, but not injuries to you or passengers in your vehicle. For a detailed look at coverage limits, state minimums, and how much to buy, see our full guide to bodily injury liability.
- Property damage: Pays for property damage in accidents that you cause, but not damage to your own vehicle. For a detailed look at how this component works, what it covers, and how limits are structured, see our guide to property damage liability coverage.
Liability car insurance does not cover the following:
- Damage to your own vehicle
- Your injuries or your passengers' injuries
- Theft of your vehicle
An independent insurance agent can help you ensure you're set up with all the required liability insurance in your state.
State Minimum Liability Coverage Requirements
Many states require you to have car insurance policies that contain limits of 25/50/25. This breaks down as $25,000 in bodily injury liability coverage per person, $50,000 in bodily injury liability coverage per accident, and $25,000 in property damage liability coverage per incident. However, state minimum car insurance requirements vary considerably. For example, Florida's minimum liability requirements are $10,000 in property damage liability and $10,000 in personal injury protection, while Alaska requires drivers to have auto policies with limits of 50/100/25.
2026 state minimum changes: New Jersey
As of January 1, 2026, New Jersey's minimum coverage requirements increased to 35/70/25. New Jersey is the only state to change its minimum auto insurance requirements this year. If you live in New Jersey, work with a local independent insurance agent to ensure you have all the required car insurance.
What Is Full Coverage Car Insurance?
Full coverage insurance provides protection for you and your vehicle, not just the other drivers involved and their property. Full coverage car insurance is not a single product or a standard industry term. However, it typically refers to an auto policy that includes liability coverage, collision coverage, and comprehensive coverage. Full coverage policies also typically have higher liability limits than the state minimum.
What full coverage car insurance covers
Full coverage car insurance comes with a deductible that typically ranges from $250 to $1,000 for your comprehensive and collision coverage.
- Collision coverage: Pays for damage to your car from a collision with another object, regardless of fault.
- Comprehensive coverage: Pays for damage to your car caused by non-collision events, such as a flood or theft.
Be sure to ask your independent insurance agent for more details about liability and full coverage insurance.
Pros and Cons of Liability vs. Full Coverage
| Liability Coverage Pros | Full Coverage Pros |
|---|---|
Lowest premium option available
|
Protects your assets with broader coverage
|
|
Meets state minimum insurance requirements
|
Satisfies lender and leasing company requirements
|
| Liability Coverage Cons | Full Coverage Cons |
|---|---|
No protection for your vehicle, theft, vandalism, or weather-related damage
|
Significantly higher premium than liability-only coverage
|
|
Deductible must be paid when filing a covered claim
|
How Much Does Liability vs. Full Coverage Cost in 2026?
The current national average monthly cost of liability vs. full coverage is $703 per year for liability and $2,058 for full coverage. This breaks down to about $59 per month for liability and $172 per month for full coverage.
You can save several hundred dollars each year by choosing liability insurance only. Keep in mind, though, that while you might save money in the short term, you also give up the additional protection that full coverage offers, which could result in big expenditures down the road.
National average cost: Annual and monthly
The table below compares the annual and monthly costs of liability vs. full coverage.
| Type of Car Insurance | Annual Cost | Monthly Cost |
|---|---|---|
| Liability Coverage | $703 | $59 |
| Full Coverage | $2,058 | $172 |
Liability vs. full coverage cost by insurance carrier (2026)
As you shop around for insurance, you’ll find that rates for liability insurance and full coverage can vary greatly from provider to provider, so it pays to compare quotes from at least a handful. That’s where an independent insurance agent can help. However, you can get started by shopping for coverage from one of the affordable carriers listed in the table below.
| Car Insurance Company | Average Monthly Liability Cost | Average Monthly Full Coverage Cost | Monthly Cost Difference |
|---|---|---|---|
| Travelers | $50 | $97 | $47 |
| National General | $50 | $112 | $61 |
| Amica | $56 | $115 | $59 |
| Progressive | $67 | $125 | $58 |
| Nationwide | $71 | $127 | $56 |
| Kemper | $62 | $127 | $65 |
| Chubb | $61 | $140 | $79 |
| UAIC | $119 | $152 | $33 |
| AAA | $69 | $160 | $91 |
| Allstate | $81 | $161 | $80 |
| AIG | $81 | $215 | $134 |
Liability vs. full coverage cost by state (2026)
What you pay for liability insurance and full coverage insurance per year can vary based on where you live. This year, Louisiana, Florida, and Colorado have the largest monthly cost gaps between liability and full coverage. In contrast, New Hampshire, Virginia, and Maine have the smallest. The table below compares the cost of liability and full coverage by state for 2026.
| State | Average Monthly Liability Cost | Average Monthly Full Coverage Cost | Monthly Cost Difference |
|---|---|---|---|
| Alabama | $56 | $105 | $49 |
| Alaska | $47 | $111 | $65 |
| Arizona | $69 | $140 | $71 |
| Arkansas | $49 | $119 | $70 |
| California | $68 | $145 | $77 |
| Colorado | $59 | $153 | $93 |
| Connecticut | $87 | $150 | $63 |
| Delaware | $108 | $181 | $73 |
| District of Columbia | $99 | $182 | $83 |
| Florida | $96 | $227 | $131 |
| Georgia | $80 | $138 | $58 |
| Hawaii | $36 | $86 | $50 |
| Idaho | $37 | $81 | $44 |
| Illinois | $51 | $102 | $51 |
| Indiana | $42 | $85 | $44 |
| Iowa | $33 | $97 | $64 |
| Kansas | $47 | $119 | $72 |
| Kentucky | $77 | $135 | $58 |
| Louisiana | $105 | $247 | $142 |
| Maine | $38 | $78 | $40 |
| Maryland | $89 | $152 | $63 |
| Massachusetts | $45 | $99 | $54 |
| Michigan | $64 | $134 | $70 |
| Minnesota | $45 | $106 | $61 |
| Mississippi | $58 | $125 | $67 |
| Missouri | $64 | $126 | $62 |
| Montana | $49 | $118 | $69 |
| Nebraska | $40 | $109 | $70 |
| Nevada | $83 | $156 | $73 |
| New Hampshire | $45 | $83 | $38 |
| New Jersey | $101 | $172 | $71 |
| New Mexico | $52 | $120 | $68 |
| New York | $63 | $121 | $58 |
| North Carolina | $50 | $105 | $55 |
| North Dakota | $41 | $89 | $49 |
| Ohio | $43 | $88 | $45 |
| Oklahoma | $55 | $135 | $80 |
| Oregon | $56 | $112 | $56 |
| Pennsylvania | $50 | $121 | $71 |
| Rhode Island | $73 | $130 | $57 |
| South Carolina | $69 | $133 | $64 |
| South Dakota | $32 | $103 | $70 |
| Tennessee | $48 | $104 | $56 |
| Texas | $69 | $157 | $88 |
| Utah | $71 | $132 | $61 |
| Vermont | $31 | $75 | $44 |
| Virginia | $54 | $97 | $43 |
| Washington | $52 | $111 | $59 |
| West Virginia | $57 | $116 | $59 |
| Wisconsin | $37 | $88 | $50 |
| Wyoming | $26 | $85 | $59 |
Note: These costs are just averages. An independent insurance agent can give you a personalized quote based on the kind of vehicle you drive and where you live.
Do I Need Liability Insurance or Full Coverage?
Choosing the right kind of auto insurance for your needs is an important decision. Is liability enough, or should you opt for full coverage? There are lots of factors to consider, such as:
- The age of your vehicle: Because of vehicle depreciation, it may make financial sense to carry liability-only insurance if your car is more than 10 years old.
- The value of your vehicle: If your car is worth $3,000 but is covered for $10,000 or more, you might be paying too much for full coverage.
- The mileage on your vehicle: Insurance premiums are often lower for a car with higher mileage. Research full coverage costs and consider whether you might be paying too much.
- If the car is leased or financed: Lenders will generally require you to have full coverage, including collision and comprehensive insurance, if you finance or lease a vehicle.
- Can you afford to repair or replace your car if it’s wrecked or stolen? If you can afford the out-of-pocket costs of repairing or replacing your vehicle without the aid of insurance, liability-only coverage might be right for you.
An independent insurance agent can also help you choose between liability vs. full coverage on a financed car, and liability vs. full coverage on an older car.
When Should You Drop Full Coverage?
When deciding if it's time to drop full coverage, you can use the 10% rule, which states that if your collision and comprehensive insurance premiums are higher than 10% of your vehicle's value, it's time to switch to minimum coverage. There's also the 4-6x rule, which states that you should drop full coverage when your car's value falls between 4 and 6 times your annual premium. However, this rule typically applies to vehicles aged 8 to 12 years and valued between $5,000 and $10,000.
Switching from Full Coverage to Liability: What to Watch For
Don't drop full coverage on a financed vehicle, as this will violate your loan or lease agreement. Lenders can put force-placed coverage on a financed vehicle that lacks full coverage. Force-placed coverage costs roughly $2,700 more annually than a standard full coverage auto policy.
Further, if you drive a financed vehicle, you'll likely want to have gap insurance. Some financing agreements may also require you to have this coverage. Gap insurance pays the difference between the amount still owed on an auto loan or lease and your vehicle's current cash value in the event of a total loss.
FAQs About Liability vs. Full Coverage Car Insurance
What does full coverage car insurance cover?
Full coverage car insurance covers bodily injury, property damage, collision and comprehensive coverage. Some policies might also include personal injury protection, medical payments coverage, and uninsured/underinsured motorist insurance.
Does full coverage cover at-fault accidents?
Yes. If you’re found at fault, liability coverage (which is included in full coverage) will help pay for damage or injuries you might cause to others.
How do I know if I have full coverage?
Check your policy's declarations page to determine if you have full coverage. If a deductible is listed under collision and comprehensive, you have full coverage.
Full coverage is a blanket term for a policy that includes liability, collision, and comprehensive car insurance. If you have all of these, you have full coverage. You can contact your insurance provider or an independent agent if you have questions.
How much is full coverage insurance on a new car in 2026?
You can expect to pay about $2,058 per year, or about $172 per month, for full coverage insurance on a new car. New vehicles typically have higher premiums because of their higher repair and replacement costs. However, costs can vary based on the make, model, and value of your vehicle. Contact an independent insurance agent for a personalized quote.
How much is liability-only car insurance in 2026?
Costs vary by state and other factors, including your driving record. You can expect to pay between $59 and $76 per month for liability-only insurance. However, costs vary from carrier to carrier and depending on the coverage limits you choose. Contact an independent insurance agent for a personalized quote.
Is liability the same as full coverage?
No. if you are at fault in an accident, liability insurance covers only injuries and property damage for the other driver, but not for you, your vehicle, or your passengers. With full coverage, both vehicles, and injuries incurred by all parties, are covered.
When should I get liability vs. full coverage insurance?
Liability insurance is required in all states, but full coverage is not. You might want to consider liability-only coverage if:
- Your vehicle is 10+ years old
- Your vehicle is valued at less than the full coverage amount
- You aren’t leasing or financing a vehicle
- You can afford to replace your vehicle outright if it’s totaled
What if my car is totaled and I only have liability insurance?
If your car is totaled and you don’t have collision coverage, you will be on the hook for the cost of repairs. Collision insurance, which helps pay for repairs or replacement after you meet your deductible, is included in full coverage policies.
Does liability insurance cover my car if someone hits me?
No, liability insurance does not cover your car if someone hits you; their insurance should cover that up to the limits of their policy. Your liability insurance only covers the other person if you hit them.
When should I switch from liability to full coverage?
When your car's value, replacement cost, or lender requirements outweigh the premium increase, it's time to switch to full coverage. Full coverage offers greater protection and might be a good choice if you want protection for your vehicle and can afford the higher premiums. Keep in mind that if you lease or finance a car, you’ll need full coverage. If you’re interested in changing your coverage, talk to an independent insurance agent who can assess your needs and give you a personalized quote.
Can I have liability-only insurance on a financed car?
No, because having liability-only insurance will violate your loan or lease agreement. This can cause your lender to put force-placed coverage on your vehicle, which costs roughly $2,700 more per year than a standard full coverage auto policy.
How much can I save by switching from full coverage to liability?
Nationally, drivers save roughly $1,300 to $1,600 per year by switching to minimum coverage, but these savings vary by carrier and state. Apply the 10% rule before deciding to drop full coverage.
Is full coverage worth it on an older car?
Probably not, especially if your annual full coverage premium exceeds 10% of your vehicle's current market value. For 8-12 year-old vehicles in the $5,000-$10,000 value range, dropping to liability often makes financial sense.
How to Get a Liability or Full Coverage Insurance Quote
If you need auto insurance, whether it’s liability or full coverage, a good place to start is with an independent insurance agent. Just prepare your vehicle and driving history information, contact a local independent insurance agent in our network, and get ready to be presented with multiple quotes from several carriers in your area. And down the road, your agent will still be there to help you update your coverage as necessary.
Sources
https://www.moneygeek.com/insurance/auto/liability-vs-full-coverage-comparision/
https://www.insurance.com/auto-insurance/states-with-minimum-car-insurance-requirement-changes/
https://www.valuepenguin.com/liability-vs-full-coverage-car-insurance
https://www.iii.org/article/auto-insurance-basics-understanding-your-coverage
https://www.iii.org/fact-statistic/facts-statistics-auto-insurance