Full Coverage vs Liability Car Insurance – Which One Do You Need?

No, only liability insurance is legally required (minimums vary by state). Full coverage is required by lenders if you have an auto loan or lease. It’s optional for vehicles you own outright.

Full coverage costs roughly 2-3x more than liability-only insurance. The national average for full coverage is about $1,771/year versus approximately $630/year for liability only — a difference of $1,141/year.

Despite its name, “full coverage” doesn’t cover everything. It typically excludes: mechanical breakdowns, normal wear and tear, personal belongings stolen from the car, rideshare driving (requires separate endorsement), and business use of a personal vehicle.

If you’re at fault, liability-only coverage will pay for the other driver’s damages but nothing for your own vehicle. You’d have to pay out of pocket to repair or replace your car. If the other driver is at fault, their liability insurance should cover your damages.