When shopping for car insurance, one of the first decisions you’ll need to make is whether to go with liability insurance or full coverage. But what do these terms actually mean, and which one is right for you?
In this article, we’ll break down the differences in simple terms so you can make the best choice for your situation.
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What Is Liability Insurance?
Liability insurance is the minimum coverage required by law in most states. It covers the costs if you’re found at fault in an accident.
Liability insurance includes:
•Bodily Injury Liability: Pays for injuries to the other party (not you) if you’re at fault.
•Property Damage Liability: Covers damage to the other person’s car or property.
Example: You rear-end someone at a stoplight. Your liability insurance will cover their medical bills and car repair — but not your own.
Pros:
•Cheaper monthly premium
•Meets legal requirements
•Good for older, low-value cars
Cons:
•Doesn’t cover your own car or medical expenses
•High out-of-pocket costs if you’re in an accident
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What Is Full Coverage Insurance?
Full coverage includes liability, collision, and comprehensive coverage. It protects you and your vehicle, regardless of who is at fault.
Full coverage typically includes:
•Liability coverage (as described above)
•Collision coverage: Pays for repairs to your car after an accident, even if you’re at fault
•Comprehensive coverage: Covers non-accident damage like theft, vandalism, weather, or hitting an animal
Example: Your car gets damaged in a hailstorm or stolen — comprehensive coverage will pay for the loss.
Pros:
•Covers both your car and others
•Peace of mind in more situations
•Often required if you’re leasing or financing
Cons:
•Higher monthly premium
•May not be cost-effective for very old or low-value vehicles
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Final Thoughts
Liability insurance is a good choice if you want to meet legal requirements and minimize your monthly payments — especially for older vehicles. But if you rely heavily on your car, or it has significant value, full coverage may offer much-needed financial protection.
Before deciding, compare quotes and think about how much risk you’re willing (and able) to take.
For more info visit our car insurance guides page