Comparing Full Coverage vs. Liability-Only Auto Insurance: Analytics and Reviews (2025)

•  averages $736–$829 per year nationwide.

•  averages $2,101–$2,677 per year.

• On average, liability-only is 61–87% cheaper than full coverage.

• The annual difference is typically $1,365–$1,697.

• • Lowest premiums

  • Meets state legal requirements

  • Good for older, low-value vehicles or drivers with enough savings to self-insure

• • No protection for your own car

  • No coverage for theft, vandalism, or natural disasters

  • High out-of-pocket risk if you cause an accident or suffer a loss

• • Pays for your car’s repairs after accidents, theft, or disasters

  • Often required by lenders for financed/leased cars

  • More peace of mind, especially for new or valuable vehicles

• • Much higher premiums—often 2–5 times liability-only

  • Deductibles apply to claims

  • May not be cost-effective for older, low-value cars

• Your car is old or has a low market value (often, if the annual full coverage premium is more than 10% of the car’s value, liability-only makes more sense).

• You can afford to repair or replace your car out-of-pocket.

• You’re on a tight budget and need the lowest legal coverage.

• Your car is new, financed, or leased (lenders require it).

• You can’t afford to replace your car if it’s totaled.

• You want protection from theft, vandalism, weather, and at-fault accidents.

• You live in a high-risk area for accidents or theft.

•  As your car ages or your financial situation changes, re-evaluate whether you still need full coverage.

•  If your annual full coverage premium exceeds 10% of your car’s value, it may be time to drop to liability-only.

•  Rates vary widely—always compare quotes for both coverage types before deciding.

Liability-only auto insurance is much cheaper and suitable for older, low-value vehicles or drivers who can self-insure. Full coverage offers much broader protection and is essential for new, financed, or valuable cars, but comes at a significantly higher cost. Regularly review your policy to ensure it matches your needs and budget in 2025