Gianetta Palmer is a writer for CarInsurance101.com, copywriter, and essayist. Her work has appeared in EverydayHealth.com, Healthline, and The Dyrt Magazine. She is the author of Scrunchie-Fried and writes a lot about car insurance in her spare time.

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Melanie Musson is the fourth generation in her family to work in the insurance industry. She grew up with insurance talk as part of her everyday conversation and has studied to gain an in-depth knowledge of state-specific car insurance laws and dynamics as well as a broad understanding of how insurance fits into every person’s life, from budgets to coverage levels. She also specializes in automa...

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Reviewed by Melanie Musson
Published Insurance Expert

UPDATED: Sep 11, 2020

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Just What's Essential

  • 49 states require drivers to purchase liability car insurance to legally drive on the roads.
  • Liability insurance only helps cover damages for an accident that you caused as the driver.
  • Full coverage car insurance policies usually include collision and comprehensive coverages.
  • On average, full coverage car insurance costs $39 more per month or $470 more annually than a liability-only car insurance policy.

Virtually every state has some form of liability car insurance law. However, liability policies only cover damages for an accident you are at fault for causing. You’ll need to invest in a full coverage policy to use insurance for other types of incidents.

Is liability cheaper than full coverage policies? Yes, but that’s because you’re receiving minimal protection. How much more is full coverage than liability? On average, full coverage car insurance costs $39 more per month, or $470 annually, than a liability-only policy.

Depending on your circumstances, a liability-only policy may or may not be worth the reduced cost of premiums.

In some cases, even though liability-only policies usually lead to affordable car insurance rates, it’s still not cheap enough to warrant the loss of coverages. In other cases, maintaining full coverage could be a waste of money.

Read through our comprehensive guide to better understand what is the difference between full coverage and liability insurance. We’ll also teach you how to research your options and make the best policy choice for your individual needs.

Whether you’re looking for full coverage or liability only insurance, find the cheapest rates right now by entering your five-digit ZIP code into our FREE quote comparison tool above.

What is the cost difference between full coverage and liability car insurance?

The cost difference between liability and full coverage insurance policies heavily depends on what state you live in. Remember, your car insurance rates are based on risk. If you’re more likely to get into an accident and file more claims, your average rates will be higher.

For these reasons, car insurance is usually more affordable in states with better road conditions, fewer accidents and vehicle thefts, and lower population densities.

How much more does full coverage cost in your state versus only liability insurance? Find out in the table below.

Average Annual Cost Difference Between Full Coverage and Liability Coverage Car Rates Insurance by State
StatesAverage Annual Full Coverage RatesAverage Annual Liability Only RatesTotal Annual Rate Difference
Idaho$679.89$344.29$335.60
Iowa$702.46$299.18$403.28
Maine$703.82$338.87$364.95
Wisconsin$737.18$374.37$362.81
Indiana$755.03$382.68$372.35
Vermont$764.02$343.12$420.90
South Dakota$766.91$300.22$466.69
North Dakota$773.30$298.18$475.12
Ohio$788.56$397.11$391.45
North Carolina$789.09$359.42$429.67
New Hampshire$818.75$400.56$418.19
Nebraska$831.02$364.64$466.38
Virginia$842.67$425.61$417.06
Wyoming$847.44$321.04$526.40
Kansas$862.93$358.24$504.69
Montana$863.52$386.29$477.23
Alabama$868.48$394.21$474.27
Tennessee$871.43$413.91$457.52
Missouri$872.43$415.88$456.55
Utah$872.93$497.53$375.40
Hawaii$873.28$458.54$414.74
Minnesota$875.49$456.82$418.67
Illinois$884.56$446.72$437.84
Oregon$904.83$584.13$320.70
Arkansas$906.34$394.13$512.21
New Mexico$937.59$488.03$449.56
Kentucky$938.51$529.21$409.30
Washington$968.80$596.67$372.13
Pennsylvania$970.51$499.06$471.45
Arizona$972.85$508.76$464.09
South Carolina$973.10$527.09$446.01
Colorado$981.64$520.04$461.60
California$986.75$489.66$497.09
Mississippi$994.05$460.50$533.55
Oklahoma$1,005.32$461.01$544.31
West Virginia$1,025.78$491.83$533.95
Alaska$1,027.75$539.68$488.07
Georgia$1,048.40$557.38$491.02
Nevada$1,103.05$681.56$421.49
Texas$1,109.66$528.75$580.91
Maryland$1,116.45$609.74$506.71
Massachusetts$1,129.29$606.04$523.25
Connecticut$1,151.07$650.94$500.13
Delaware$1,240.57$799.30$441.27
Florida$1,257.13$857.64$399.49
Rhode Island$1,303.50$759.80$543.70
District of Columbia$1,330.73$628.82$701.91
New York$1,360.66$804.51$556.15
Michigan$1,364.00$795.32$568.68
New Jersey$1,382.79$869.57$513.22
Louisiana$1,405.36$775.83$629.53
U.S. Average$1,009.38$538.73$470.65
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So, is liability car insurance only really cheaper than a full coverage policy? According to the data above, you will receive cheaper quotes if you only purchase your state’s minimum liability requirements.

However, the difference between liability and full coverage insurance costs in many states is very reasonable. For example, Oregon, Idaho, Wisconsin, and Maine are all under $30 more per month.

If you live in one of these states and drive fairly often, investing in a fuller coverage policy might be worth your while.

However, in states like Texas, Louisiana, and in Washington D.C. the price gap does get wider. You’ll need to pay around $50 or more per month to receive full coverage car insurance in those regions.

Keep reading, we’ll break down the differences between full coverage and liability only-policies so you know what coverage is best for you.

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What is the difference between liability and full coverage insurance?

You may still be wondering why purchasing extra car insurance coverage is even necessary, especially when the state minimum standards can be so much cheaper than policies with additional protections added.

The truth is, those affordable liability-only policies often do not provide you with enough protection.

Similarly, if you’re financing or leasing a vehicle, you have less choice about what coverages your policy will contain. Your lienholder will determine what the insurance policy should require.

What’s the difference between full coverage and liability insurance? As mentioned above, liability car insurance poliicies will only pay for the other driver’s vehicle repairs, medical costs, and other damages when you, the policy-holder, are at fault for causing an accident.

Watch the following video from Allstate for a deeper look into exactly what liability insurance does and does not cover.

In other words, if you are liable for causing an accident, this type of coverage prevents you from having to pay for the other driver’s expenses entirely out of pocket.

However, you will still be responsible for paying for all of your own damages.

While there is no single definition for what a full coverage policy actually is, in most cases it includes liability coverage as well as two additional policies, comprehensive and collision.

Comprehensive coverage helps pay for damages to your vehicle that do not include hitting another driver.

For example, vandalism, weather damage, damage caused by animals, and vehicle theft are all covered by a comprehensive policy. In other words, damages caused when your vehicle is not in motion.

Collision coverage helps pay for damages to your vehicle if you hit another car or object, such as a fence, tree, or telephone pole. In other words, damage caused when your vehicle is in motion.

Both comprehensive and collision policies usually include deductibles, which is the highest amount you will pay out of pocket before your insurance company steps in to cover the rest of the damages.

Raising your deductible will help lower your monthly rates. However, if your deductible is too high, these types of coverages might not really be worthwhile.

Full coverage insurance can include other additional policies as well, and every insurance company puts its own unique spin on these offers.

For example, you could choose a road-side assistance program, uninsured motorist protection, or even GAP insurance.

How does GAP car insurance work? If you drive a financed vehicle and owe more on your loan than the car is actually worth, this type of policy helps pay for what you still owe on your loan in the event the vehicle is totaled in an accident.

Now that you understand the difference between full coverage versus liability car insurance costs and coverages, when should you drop full coverage on your car and simply stick with the liability-only policy?

Keep reading to learn more.

When should you drop full coverage insurance on your car?

Knowing when to drop full coverage car insurance can be a little tricky. If you drive an average amount and full coverage car insurance fits your budget, our expert opinion is that you should maintain full coverage insurance to best protect yourself and your vehicle.

However, if the price difference between full coverage and liability coverage is too expensive for you, purchasing your state minimum requirements is perfectly acceptable.

Dropping full coverage car insurance also makes sense for people who drive much less than average.

Similarly, you should consider dropping fuller coverage policies if you drive an older vehicle that is worth less than $4,000 and you can easily afford to repair and replace it out of pocket. Or, if you are financially able to pay for unpredictable medical expenses in case of an accident.

However, if you finance a vehicle, or if you cannot easily replace a totaled vehicle, it is a good idea to buy a full coverage policy to prevent yourself from falling into a hard financial spot should a serious accident occur.

According to the Insurance Information Institute, even though 49 states legally require drivers to purchase liability car insurance, approximately 14 percent of drivers on the road are uninsured.

If you are hit by one of these drivers, you will be responsible for paying for all damages out of pocket. Ask yourself, is this something you are can afford to do? If not, fuller coverage might be right for you.

The good news is that full coverage policies do not have to cost you an arm and a leg. By comparing quotes from different companies and applying for car insurance discounts, such as safe driver discounts, you can lower your annual rates substantially.

By putting in the time and effort to do the research, you’ll end up paying only for the coverages you actually need, which means the investment will be worth your while.

Now that you know the difference between liability and full coverage car insurance, you’re ready to make an educated choice as to what coverage is right for your needs. Compare the most affordable car insurance rates by entering your five-digit ZIP code into our FREE quote comparison tool below.