Understanding Liability vs. Full Coverage: What’s Right for You in 2025?

Feature	Liability-Only Coverage	Full Coverage
What it covers	Injuries and property damage you cause to others	Liability + damage to your own car (collision & comprehensive)
Required by law?	Yes, in nearly all states	No (but required by lenders/lessors if you finance/lease a car)
Protects your car?	No	Yes (accidents, theft, vandalism, weather, etc.)
Average annual cost	$772	$1,970
Best for	Older, low-value cars; those who can afford to replace/repair	Newer, high-value, or financed cars; those seeking more protection

Feature

Liability-Only Coverage

Full Coverage

What it covers

Injuries and property damage you cause to others

Liability + damage to your own car (collision & comprehensive)

Required by law?

Yes, in nearly all states

No (but required by lenders/lessors if you finance/lease a car)

Protects your car?

Yes (accidents, theft, vandalism, weather, etc.)

Average annual cost

$772

$1,970

Best for

Older, low-value cars; those who can afford to replace/repair

Newer, high-value, or financed cars; those seeking more protection

Liability-Only Insurance

Covers: Medical expenses and property damage you cause to others in an accident, up to your policy limits.

Does not cover: Damage to your own car, injuries to you/your passengers, theft, vandalism, or non-collision events.

Required: By law in almost every state.

Best for: Drivers with older or low-value cars, or those who can afford to pay for their own repairs or replacement out-of-pocket.

Full Coverage Insurance

Includes: Liability, collision (damage to your car in an accident), and comprehensive (damage from theft, weather, vandalism, etc.).

Covers: Both damage/injury you cause to others and damage to your own vehicle, regardless of fault (up to policy limits).

Required: Not by law, but typically by lenders if you lease or finance your car.

Best for: New, expensive, or financed vehicles; drivers who want maximum financial protection.

How to Decide What’s Right for You

Choose liability-only if:

Your car is old or low in value (typically worth less than 10x your annual premium)
You can afford to repair/replace your car yourself
You want the lowest possible premium and meet state minimums

Choose full coverage if:

Your car is new, valuable, or financed/leased
You can’t afford to replace your car out-of-pocket after a major loss
You want protection from a wider range of risks (theft, weather, uninsured drivers, etc.)

Tip: Always compare quotes from multiple insurers, as rates and discounts vary widely.

In summary:
Liability-only insurance is budget-friendly and meets legal requirements, but only protects others. Full coverage costs more but safeguards your own vehicle and finances, making it the better choice for most new, valuable, or financed cars in 2025