Full Coverage vs. Liability-Only Insurance

The easiest way to know the difference between full coverage vs. liability-only insurance policies is that full coverage policies will provide you with more coverage than a liability policy. Liability-only will only cover the damages you cause to the other party in an accident. Full coverage auto insurance policies will protect you from paying out of pocket for personal injuries, fire and flood, and more. Shop online with our comparison tool to compare full coverage vs. liability auto insurance costs and find affordable coverage that meets your needs.

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Rachel Bodine graduated from college with a BA in English. She works as an associate editor and writer for 4autoinsurancequote.com for over a year and enjoys creating content that offers expert advice on car insurance topics.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs...

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Reviewed byLeslie Kasperowicz
Former Farmers Insurance CSRhttps://res.cloudinary.com/quotellc/image/upload/insurance-site-images/4autoins-live/6ea5d860-leslie-kasperowicz.jpg

UPDATED: Aug 24, 2020

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There are many ways to cut corners on your monthly expenses, and toying around with your auto insurance coverage is one of the most popular methods of doing so. The economy has been a bit unstable lately, so if you are caught in a bind and your debts are piling up, you might consider dropping some of your auto insurance coverage plans. While this could be a quick fix that could get you out of your current jam, it’s often a shortsighted decision that could get you into a bit of trouble down the road.

The decision often boils down to either having full coverage auto insurance or dropping down to liability-only auto insurance. Below, we will explain what these two coverage types are, and why getting rid of coverage isn’t always the best idea.

What Is Full Coverage Auto Insurance?

full-coverage-liability-onlyFull coverage auto insurance”, which isn’t actually an official name used by insurance companies, often refers to an auto insurance plan that has liability coverage, collision coverage, and comprehensive coverage. Liability coverage, which we will go into a bit more detail further down the page, protects you from paying for any damages you might cause to the other party in an accident. Collision coverage will pay for damages that you cause to your own vehicle in a crash. Comprehensive coverage covers additional non-accident related costs, such as damage from theft, vandalism, floods, hurricanes, etc.

While there is no such auto insurance plan that goes by the name “full coverage,” a program of this nature often provides a blanket of insurance that will cover you in a vast majority of the situations you could get yourself into on the road.

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What Is Liability-Only Auto Insurance?

“Liability-only insurance,” usually refers to the state’s minimum required auto insurance coverage levels in your state. All states require that you have liability coverage for the car you are driving. What liability coverage does is protect your assets in the event you are “at fault” in an accident and cause damage. Liability insurance will pay for the damage you cause and does not require you to pay a deductible.

While all states require that you have liability coverage, the amount of coverage they require depends on the state. Some states also require other coverage types apart from liability. The chart below illustrates what is required by your state.

BIL stands for bodily injury liability, and PDL stands for property damage liability. BIL is the insurance that pays for medical treatment if there are injuries from the car accident. PDL is the insurance that pays for damaged property from the car accident.

In Alabama, for example, the chart states 25/50/25. This means your policy would pay $25,000 for each individual injured and up to $50,000 for the total accident (if multiple people were injured. It would also pay up to $25,000 for property damage that occurs.

State Minimum Auto Insurance Levels

Find your state below to view the bodily injury and property damage liability limits.

State

BIL/BIL/PDL

Alabama25/50/25
Alaska50/100/25
Arizona15/30/10
Arkansas25/50/25
California15/30/5
Colorado25/50/15
Connecticut20/40/10
Delaware15/30/10
District of Columbia25/50/10
Florida10/20/10
Georgia25/50/25
Hawaii20/40/10
Idaho25/50/15
Illinois25/50/20
Indiana25/50/10
Iowa20/40/15
Kansas25/50/10
Kentucky25/50/10
Louisiana10/20/10
Maine50/100/25
Maryland20/40/15
Massachusetts20/40/5
Michigan20/40/10
Minnesota30/60/10
Mississippi25/50/25
Missouri25/50/10
Montana25/50/10
Nebraska25/50/25
Nevada15/30/10
New Hampshire25/50/25
New Jersey15/30/5
New Mexico25/50/10
New York25/50/10
North Carolina30/60/25
North Dakota25/50/25
Ohio25/50/25
Oklahoma25/50/25
Oregon25/50/10
Pennsylvania15/30/5
Rhode Island25/50/25
South Carolina25/50/25
South Dakota25/50/25
Tennessee25/50/15
Texas30/60/25
Utah25/65/15
Vermont25/50/10
Virginia25/50/20
Washington25/50/10
West Virginia20/40/10
Wisconsin25/50/10
Wyoming25/50/20

 

At first glance, these coverage amounts might seem to be sufficient. Keep in mind, however, that most insurance companies recommend a 100/300/100 split. Meaning $100,000 to $300,000 for bodily injury liability and $100,000 for property damage liability. Legal and medical bills in the United States, as we all know, are outrageous. Having more coverage than you need is usually smarter than having not enough.

Deciding to Switch from Full Coverage to Liability-Only

When it comes to auto insurance, not only is it the law to have your vehicle insured, you might also want to protect yourself from paying too much out-of-pocket if an accident occurs. Car accidents are a multi-billion dollar business in the United States and have left thousands of needy individuals bankrupt. When our customers want to start dropping auto insurance coverage because they can’t afford it, or would want to spend their money elsewhere, we strongly advise against them doing so.

While switching from full coverage auto insurance to liability-only auto insurance is tempting, there are actually wiser ways to save money. You should first compare auto insurance quotes from different companies. Each auto insurer uses different algorithms to calculate your insurance rates, so you might actually find better coverage at a cheaper price by merely switching providers.

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