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

Liability-Only Insurance

• Covers: Medical expenses and property damage you cause to others in an accident, up to your policy limits123.

• Does not cover: Damage to your own car, injuries to you/your passengers, theft, vandalism, or non-collision events2.

• Required: By law in almost every state12.

• Best for: Drivers with older or low-value cars, or those who can afford to pay for their own repairs or replacement out-of-pocket1.

Full Coverage Insurance

• Includes: Liability, collision (damage to your car in an accident), and comprehensive (damage from theft, weather, vandalism, etc.)137.

• Covers: Both damage/injury you cause to others and damage to your own vehicle, regardless of fault (up to policy limits)13.

• Required: Not by law, but typically by lenders if you lease or finance your car1.

• Best for: New, expensive, or financed vehicles; drivers who want maximum financial protection12.

Cost Comparison (2025 Averages)

• Liability-only: $772/year

• Full coverage: $1,970/year

• Costs vary by state, vehicle, driving history, and insurer. For example, Michigan has the highest rates ($1,849 liability, $4,638 full coverage), while Maine is among the cheapest ($501 liability, $1,100 full coverage)1.

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 widely12.

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