North Dakota Law

Updates from the University of North Dakota School of Law.

Liability vs. Full Coverage: Professor Paul Traynor shares expert opinion

Learn more about the differences between liability and full coverage car insurance


, Car Insurance WriterMar 1, 2023

What’s the Difference Between Liability and Full Coverage?

The difference between liability and full coverage is that liability will cover damage to other vehicles or injuries to other people from accidents you cause, while full coverage also covers your own vehicle. Liability insurance is required in most states, while full coverage is only required if you lease or finance a car.

Key Things to Know About Liability vs. Full Coverage Car Insurance

  • Full coverage car insurance costs an average of $4,211 per year.
  • Liability car insurance costs an average of $1,407 per year.
  • Full coverage includes collision and comprehensive insurance, while liability coverage does not.
  • With liability-only insurance, you’ll be on the hook for your own expenses after an accident.
  • You should purchase full coverage insurance if you can afford it.

Liability Insurance vs. Full Coverage: Key Differences

Category Liability Full Coverage
What It Includes Property damage liability

Bodily injury liability



Property damage liability

Bodily injury liability

Is It Required? Yes, by law in nearly every state Yes, if you are leasing or financing your car
Average Annual Cost $1,407 per year $4,211 per year
Uses Deductible? No Yes

The average annual cost of liability insurance reflects the cost of state-minimum coverage nationwide. The cost of full coverage includes collision and comprehensive insurance, as well as uninsured/underinsured motorist coverage.

Liability vs. Full Coverage Cost by Company

Liability insurance is 67% cheaper than full coverage insurance, on average. The exact cost difference between liability and full coverage car insurance for a given driver depends on several factors, including the driver’s insurance company.

Company Minimum Coverage Full Coverage
Geico $796 per year $2,886 per year
USAA $807 per year $2,802 per year
Travelers $893 per year $3,518 per year
Grange $976 per year $4,253 per year
Mercury $1,032 per year $3,365 per year
Progressive $1,033 per year $4,041 per year
State Farm $1,032 per year $3,514 per year
Auto-Owners $1,108 per year $2,865 per year
Esurance $1,218 per year $3,166 per year
AAA $979 per year $5,509 per year

Data provided by Quadrant Information Services. Rates reflect average costs in California

What Is Liability Insurance?

Liability insurance is a type of coverage that pays for injuries and property damage sustained by other people and their property in accidents that you cause. Nearly every state requires drivers to carry liability insurance, and in many states, liability insurance is the only type of car insurance that you need to have.

Keep in mind that liability insurance will never pay for your own expenses after a car accident, so if you want your own medical bills and repair costs to be covered, you will need to get additional coverage.

Learn more about liability insurance.

What Is Full Coverage Insurance?

Full coverage is a policy that includes collision and comprehensive coverage in addition to a state’s minimum car insurance requirements. Unlike liability insurance, full coverage covers the policyholder’s own expenses, even in accidents where they are at fault.

Collision insurance is coverage that pays to repair or replace your car after any accident. Comprehensive insurance, on the other hand, covers repair expenses when your car is damaged by something other than an accident, such as vandalism or a natural disaster. Neither type of insurance is required by state law, but you usually have to get both if your car is leased or financed.

Full coverage can also include other types of insurance, such as personal injury protectionmedical payments coverage, and uninsured/underinsured motorist insurance. Some states require drivers to have these types of insurance anyway, but they may be optional in other states.

Learn more about full coverage insurance.

Do You Need Liability Insurance or Full Coverage?

You should always get full coverage insurance if you can afford it. No matter how good of a driver you might be, your vehicle is likely going to get damaged in some way or another. Having full coverage insurance will provide a wide financial safety net that will alleviate some of the burden that comes with handling car issues.

When deciding whether or not to purchase liability-only insurance, you need to consider your state’s laws, the value of your car, and your financial situation. A general rule of thumb is that you can consider dropping full coverage insurance if the cost is more than 10% of your car’s value. However, you should not drop collision and comprehensive coverage if you cannot afford to pay out of pocket to repair or replace your car when it’s unexpectedly damaged.

Learn more about whether you need liability insurance or full coverage.

Ask the Experts

To gain more insight about liability vs. full coverage insurance, WalletHub posed the following questions to a panel of experts. Click on the experts below to view their bios and answers.

1. What is the biggest advantage of liability insurance over full coverage?
2. What is the biggest advantage of full coverage over liability insurance?
3. What types of drivers do you think should consider liability-only car insurance?
4. Should people always get full coverage if they can afford it?