Most states require drivers to have liability coverage in their auto insurance policy. This is coverage that pays for another driver’s medical bills or property damage if you are at fault for an accident. Full coverage, on the other hand, is an optional coverage that includes liability coverage as well as additional protection for your own vehicle.
Collisions can be expensive, so having the right coverage in place is crucial to protecting yourself and your vehicle. In 2020, the average claim for passenger injuries in a crash was $20,235. For property damage, such as denting someone’s fender or totaling their car, the average claim was $4,711. Without insurance, you would be responsible for paying these costs out of pocket.
Compare liability with full coverage to determine which option — either liability insurance by itself or bundled into full coverage — would be the most beneficial for you.
Liability vs. Full Coverage Car Insurance At a Glance
Liability and full coverage car insurance both provide financial protection after a car accident where you are found to be at fault. Liability coverage helps pay for the other driver’s claims, and when bundled together into full coverage, your full coverage policy would also pay for expenses involved with repairing damage done to your own vehicle, regardless of who was at fault.
| Liability Insurance | Full Coverage Insurance | |
|---|---|---|
| Mandatory? | Yes, with exceptions for some Alaska, New Hampshire, and Virginia drivers | No, this is optional |
| Coverages | Bodily injury liability, property damage liability | Multiple, including liability coverages. Varies depending on insurer and policy. |
Understanding Liability Insurance
There are two types of liability insurance:
- Bodily injury liability: Bodily injury liability covers the other driver’s medical expenses, wages lost due to injury, and any rehab or recovery treatments they need. For example, if you are at fault for a collision and the other driver needs to go to the hospital for X-rays, your bodily injury liability coverage would pay for it.
- Property damage liability: Property damage liability covers the repair costs to the other driver’s property if you cause an accident, including to their car or belongings inside the car. For example, if you are distracted and ram into another driver’s car, damaging their bumper and fender as well as causing their laptop inside to fall and crack, your property liability coverage would help pay for the replacement or repair of both the car and the laptop.
Any time you cause an accident, you’re legally responsible for paying for any damage and injury treatment suffered by the other driver, as well as their passengers if they had any in the vehicle at the time of the collision. Liability insurance is meant to help you with these expenses. However, liability insurance doesn’t cover any damages to your own car or your own injuries.
Many liability insurance policies have a set limit per person and per accident on what they pay out. For example, your policy might offer $25,000 bodily injury liability per person in coverage, with a maximum of $50,000 of bodily injury coverage per accident. If you are at fault for an accident and there are two injured people in the other vehicle and each of their medical bills is $30,000, your coverage would cover up to $25,000 per person, leaving you to pay for the remaining $5,000 per person out of pocket. The per accident limit could be triggered if the other vehicle had three people inside, each with $25,000 in medical bills for a total of $75,000. In this instance, your liability coverage would only pay up to the $50,000 per accident limit, leaving you to cover the remaining $25,000 out of pocket.
There is typically no deductible for liability claims.
Mandatory Auto Insurance Liability Coverage By State
The majority of states require liability coverage to ensure you can pay for damages to the other driver if you are involved in an at-fault accident. The 3 exceptions are Alaska, New Hampshire, and Virginia, but even these states have some rules about insurance to follow, including minimum coverage limits if you do decide to purchase insurance.
For example, Alaska requires at least $50,000 of bodily injury protection per person with a maximum of $100,000 per accident, along with $25,000 minimum for property damage. However, a number of areas are excluded from the law because they are rural and less populated.
New Hampshire does not require auto insurance, but drivers do need to show proof of financial responsibility in case they’re involved in an at-fault accident. Virginia does have minimum insurance laws in place, but drivers also have the option to not to get insurance if they pay a $500 uninsured motor vehicle fee to acknowledge that they’re driving at their own risk.
Here’s a look at the state-by-state minimum liability coverage requirements:
| State | Minimums |
|---|---|
| Alabama | $25,000 bodily injury liability limit per person $50,000 maximum for all bodily injuries per accident $25,000 maximum for property damage per accident |
| Alaska | $50,000/$100,000 for bodily injury or death $25,000 for property damage |
| Arizona | $25,000 bodily injury liability for 1 person $50,000 for 2 or more persons $15,000 property damage liability |
| Arkansas | $25,000 for bodily injury or death of 1 person in any 1 accident $50,000 for bodily injury or death of 2 or more persons in any 1 accident $25,000 for damage to or destruction of the property of others |
| California | $15,000 for injury/death to 1 person $30,000 for injury/death to more than 1 person $5,000 for damage to property |
| Colorado | $25,000 for bodily injury or death to any 1 person in an accident $50,000 for bodily injury or death to all persons in any 1 accident $15,000 for property damage in any 1 accident |
| Connecticut | $25,000 per person $50,000 per accident for bodily injury liability $25,000 per accident for property damage liability |
| Delaware | $25,000 for bodily injury or death of 1 person $50,000 for bodily injury or death of 2 or more persons $10,000 for injury to or destruction of property of others |
| Florida | $10,000 minimum limits of bodily injury liability per person $20,000 per crash $10,000 property damage liability per crash |
| Georgia | $25,000 per person Bodily Injury Liability $50,000 per incident $25,000 per incident Property Damage Liability |
| Hawaii | $20,000 per person $40,000 per accident bodily injury liability $10,000 per occurrence property damage liability |
| Idaho | $25,000 per person Bodily Injury Coverage $50,000 per accident Bodily Injury Coverage $15,000 in Property Damage Liability coverage |
| Illinois | $25,000 for injury or death of 1 person in an accident $50,000 for injury or death of more than 1 person in an accident $20,000 for damage to property of another person |
| Indiana | $25,000 for bodily injury to or the death of 1 individual $50,000 for bodily injury to or the death of 2 or more individuals in any 1 accident $25,000 for damage to or the destruction of property in 1 accident |
| Iowa | $20,000 of bodily injury to or death of 1 person in any 1 accident $40,000 because of bodily injury to or death of 2 or more persons in any 1 accident $15,000 because of injury to or destruction of property of others in any 1 accident |
| Kansas | $25,000/person for bodily injury $50,000/accident for bodily injury $25,000/accident for property damage |
| Kentucky | $25,000 for all claims for bodily injury damages sustained by any 1 person $50,000 for all bodily injury damages sustained by all persons as a result of an accident $25,000 for all property damage as a result of any 1 accident |
| Louisiana | $15,000 for bodily injury to 1 person $30,000 for bodily injury to more than 1 person in a single accident $25,000 coverage for damage to some1 else’s vehicle or other property |
| Maine | $50,000 liability for the injury to or death of any 1 person $100,000 liability for 1 accident resulting in injury to or death of more than 1 person $25,000 liability for property damage |
| Maryland | $30,000 for bodily injury $60,000 for 2 or more people $15,000 property damage |
| Massachusetts | $20,000 per person – Bodily Injury to Others $40,000 per accident – Bodily Injury to Others $5,000 per accident – Damage to Some1 Else’s Property |
| Michigan | $50,000 for a person who is hurt or killed in an accident $100,000 for each accident if several people are hurt or killed $10,000 for property damage in another state |
| Minnesota | $30,000 for injuries to 1 person $60,000 for injuries to 2 or more people $10,000 for physical damage to the other driver’s vehicle or for damage to property |
| Mississippi | $25,000 per person (limited to a single accident) $50,000 per accident for bodily injury $25,000 per accident for property damage |
| Missouri | $25,000 per person for bodily injury $50,000 per accident for bodily injury $25,000 per accident for property |
| Montana | $25,000 because of bodily injury to or death of 1 person in any 1 accident and subject to the limit for 1 person $50,000 because of bodily injury to or death of 2 or more persons in any 1 accident $20,000 because of injury to or destruction of property of others in any 1 accident |
| Nebraska | $25,000 because of bodily injury to or death of 1 person in any 1 accident $50,000 because of bodily injury to or death of 2 or more persons in any 1 accident $25,000 because of injury to or destruction of property of others in any 1 accident |
| Nevada | $25,000 for bodily injury or death of 1 person in any 1 accident $50,000 for bodily injury or death of 2 or more persons in any 1 accident $20,000 for injury to or destruction of property of others in any 1 accident |
| New Hampshire | $25,000 per person for bodily injury $50,000 if 2 or more persons are hurt $25,000 for property damage |
| New Jersey | $15,000 per person – bodily injury liability $30,000 per accident – bodily injury liability $5,000 per accident – property damage liability |
| New Mexico | $25,000 for bodily injury to or death of 1 person $50,000 for bodily injury to or death of 2 or more persons $10,000 for property damage in any 1 accident |
| New York | $25,000 for bodily injury and $50,000 for death for a person involved in an accident $50,000 for bodily injury and $100,000 for death for 2 or more people in an accident $10,000 for property damage for a single accident |
| North Carolina | $30,000 Bodily injury (1 person) $60,000 Bodily injury (2 or more people) $25,000 Property damage |
| North Dakota | $25,000 per person (the maximum amount payable to 1 person) $50,000 per accident (the maximum amount payable to all people injured in 1 accident) $25,000 per accident – property damage liability |
| Ohio | $25,000 for injury/death of 1 person $50,000 for injury/death of 2 or more people $25,000 for property damage in an accident |
| Oklahoma | $25,000 of bodily injury protection per person $50,000 per accident $25,000 of property damage protection |
| Oregon | $25,000 per person $50,000 per crash for bodily injury to others $20,000 per crash for damage to others’ property |
| Pennsylvania | $15,000 for injury or death of 1 person in an accident $30,000 for injury or death of more than 1 person in an accident $5,000 for damage to property of another person |
| Rhode Island | $25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident |
| South Carolina | $25,000 per person for bodily injury $50,000 for all persons injured in 1 accident $25,000 for all property damage in 1 accident |
| South Dakota | $25,000 bodily injury liability insurance per person $50,000 total bodily injury liability per accident $25,000 property damage liability per accident |
| Tennessee | $25,000 for each injury or death per accident $50,000 for total injuries or deaths per accident $15,000 for property damage per accident |
| Texas | $30,000 of coverage for injuries per person $60,000 per accident $25,000 of coverage for property damage |
| Utah | $25,000 because of liability for bodily injury to or death of 1 person $65,000 because of liability for bodily injury to or death of 2 or more persons arising out of the use of a motor vehicle in any 1 accident $15,000 because of liability for injury to, or destruction of, property of others arising out of the use of a motor vehicle in any 1 accident |
| Vermont | $25,000 for 1 person $50,000 for 2 or more persons killed or injured $10,000 for damages to property in any 1 crash |
| Virginia | $30,000 Injury or death of 1 person $60,000 Injury or death of 2 or more people $20,000 Property damage |
| Washington | $25,000 for injuries or death to another person $50,000 for injuries or death to all other people $10,000 for damage to another person’s property |
| Washington, D.C. | $25,000 per person $50,000 per accident $10,000 Property Damage Liability |
| West Virginia | $25,000 for 1 crash, 1 injury $50,000 for 1 crash, 2 or more injuries $25,000 for property damage |
| Wisconsin | $25,000 for the injury or death of 1 person $50,000 for the injury or death of more than 1 person $10,000 for property damage |
| Wyoming | $25,000 bodily injury 1 person $50,000 bodily injury per accident $20,000 property damage liability |
Advantages of Liability-only Car Insurance
- Your premiums could be cheaper. Because liability insurance doesn’t offer any coverage for your own car in an accident, it might be much more affordable than a full coverage policy.
- You can avoid wasting money insuring an older car. Many people with older cars prefer liability insurance instead of full coverage because it’s not worth paying a higher monthly premium for protection on a car where repair costs could outpace the actual value of the vehicle.
- You can avoid paying a fine or facing other consequences. Many states impose a fine or driver’s license suspension if you’re caught driving without the minimum liability insurance coverage. For example, in Pennsylvania, you could face a $300 fine, a 3-month vehicle registration suspension, and a 3-month driving license suspension.
- You can have extra money available for emergencies. The price difference between full coverage and liability coverage could allow you to put some extra money into savings. You can use this fund to pay for damage to your vehicle if you get in an accident.
Understanding Full Coverage Car Insurance
Full car insurance coverage includes liability coverage as well as additional coverage for your expenses in a car accident, whether or not you are at fault. Here are some of the main coverages you might see in this type of policy:
- Liability insurance: Liability insurance offers coverage for the other driver’s injuries and property damage when you’re at fault for an accident.
- Collision insurance: Collision insurance offers coverage for your car if you’re in a collision, regardless of fault. For example, if you hit a guardrail and damage your fender, collision insurance would help pay for your vehicle’s repairs from the incident. Collision insurance also covers accidents when your car is parked, such as if another driver backs into your car in a parking lot.
- Comprehensive insurance: While comprehensive may sound like a synonym for full coverage, it’s actually a different type of product altogether. Comprehensive insurance offers coverage for your car during non-collision events, such as animal accidents, weather, fire, and vandalism. As an example, if there’s a large storm and your car gets flooded, comprehensive coverage would help pay for repairs or the replacement of your vehicle if it is deemed to be totaled.
- Personal injury protection (PIP): Personal injury protection, which is required in many states, offers coverage for your medical bills if you’re in an accident. Your personal health insurance policy would cover the majority of your medical bills in an accident, but PIP would help to fill in the gaps in coverage for driving-related injuries. It can pay for lost wages due to injuries, surgical treatments, and ambulance services.
- Medical payments (MedPay): MedPay insurance is very similar to PIP, in that it can provide coverage for medical bills that your health insurance doesn’t cover after an accident. The difference is that it excludes some of PIP’s additional coverages, such as lost wages and rehabilitation services.
- Uninsured and underinsured motorist coverage: Uninsured and underinsured motorist coverage, which is required in many states, offers protection if you’re in an accident caused by someone who doesn’t have insurance or doesn’t have enough insurance to cover the damage. It can cover damage to your car or property, as well as help pay for your medical bills.
Full coverage policies also meet each state’s minimum coverage requirements, such as liability insurance, uninsured/underinsured motorist coverage, and PIP minimums.
Advantages of Full Coverage Car Insurance
- Your car has full protection, no matter who is at fault. No matter what type of accident you’re in, the main difference between full coverage and liability coverage is that full coverage offers more thorough protection for your car. As long as your expenses don’t exceed your policy maximums, the insurance company could pay them.
- It may be required if you took out an auto loan or are leasing your vehicle. If you took out a loan to pay for your car, many lenders require you to have full coverage so that the car is protected in case of accident. This ensures that their investment in your vehicle stays safe and that you can pay the lender back if the car ends up being totaled.
- You can pick and choose which coverages you want. Since full coverage isn’t a set type of coverage, it can give you the flexibility to tailor which coverages you want to add on. For example, you may find you don’t need MedPay as well as PIP, especially if you already have extensive health insurance coverage. Or, you may want to add on other optional coverages such as rental car reimbursement coverage for occasions where you need a loaner after your car is in an accident.
Things to Consider When Deciding Between Liability and Full Coverage Car Insurance
When deciding between liability vs. full coverage, keep in mind that your driving habits, monthly budget, risk factors, and where you live could all affect whether one type of coverage is better for your needs. In addition, extra costs or extra savings upfront do not necessarily mean it is the most affordable option over the long run. As an example, if budget is one of your most important consideration, you might be tempted to choose liability coverage without full coverage because it is cheaper when it comes to monthly premium payments. However, if you’re in an accident, that means you may have to pay for repairs for your own car out of pocket, costing you significantly more than full coverage would have.
You Should Consider Liability-only Insurance
- You have a nearly spotless driving record. If you’ve proven that you’re unlikely to be involved in a collision of any sort, then you may be able to get by with liability coverage alone. This would allow you to save money on monthly premiums with a relatively low risk of needing the extra coverages that full coverage would provide.
- You live in a relatively rural area. Rural areas typically have a much lower volume of vehicles on the road, making collisions more unlikely. Just like if you have a clean driving record, it would allow you to spend less on your overall auto insurance policy while maintaining a low risk of needing extra coverage. That said, comprehensive coverage could still be helpful for protection against incidents like fire, hail, and theft.
- You have an emergency fund if you get in an accident. As noted above, liability insurance might be cheaper upfront than full coverage, but not if you’re in a collision. However, if you have a crash fund that you can dip into if you have an accident, it might be worth it to take advantage of lower monthly premiums.
- Your car isn’t worth insuring. Many older cars that have a relatively low resale value often aren’t worth insuring with full coverage. The payout you’d get after a collision wouldn’t justify the increase in monthly premiums. In these cases, maintaining just state-mandated liability coverage would often be enough.
- You don’t drive your car a lot. If you drive your car infrequently, such as only a few times a month, then it may not be worth it to have full coverage due to the low probability of being involved in an accident. The more you’re on the road, the more likely you are to get in an accident.
You Should Consider Liability Insurance with Other Coverages
- You drive a fair amount. If you drive a lot, your chances of getting in an accident might be increased because even the safest drivers can’t control how other cars behave on the road. In these instances, liability with comprehensive or collision coverages added on might give you protection if you’re hit by another driver.
- Other people drive your vehicle. Car insurance typically follows the car, not the driver. That means your insurance kicks in even if someone else is driving and has an accident while operating your vehicle. If you plan on loaning your car to family members or friends, it can be a good idea to have liability insurance with additional protections.
- You have a newer car. Newer cars are typically more valuable and are more costly to replace. Unless you have the means to buy yourself a new car outright, having liability insurance plus additional coverages can ease the financial burden if you total your new car in an accident.
- You live in an area with a lot of natural disasters. If you live in an area that sees major storms, tornados, and wildfires, having liability insurance and comprehensive insurance can protect you from the unexpected and often unpredictable natural disasters.
You Should Consider Full Coverage Car Insurance
- You drive very frequently. If you’re on the road multiple times a day, such as commuting to and from work, then having full coverage is important. Being on the road more often increases your risk of getting in an accident, and full coverage may be worth it to offset this additional risk.
- Your car is valuable. People with new or expensive cars might choose full coverage so that their insurance can help pay the bills if they have an accident. This is especially important if your car is totaled, as your auto loan lender still expects to be paid back, even if your car is inoperable after a collision.
- You live in a densely populated area. Because cities have more cars on the road, confusing traffic patterns, and narrower roadways, you may be more likely to get in a crash in this type of setting. Even if you consider yourself a safe driver, full coverage can offer protection from someone side-swiping your car while it’s parked on the street or from a burglar that broke into your car overnight.
- You’ve taken out a loan to pay for your car. Most lenders require you to have full coverage if you borrowed from them to pay for your car. If you don’t enroll in this coverage, they may do so for you at a much more expensive rate.