Full Coverage vs. Liability Auto Insurance

Getting car insurance can seem easy enough, from the outside. But as you dig deeper into the topic, questions can surface — especially if this is your first time buying auto coverage. If you find yourself wondering what the difference is between full coverage vs. liability, you’re in good company.

There’s a big difference when it comes to liability insurance vs. full coverage. Keep in mind that states vary one to the other on what you’re required  to carry. If you still owe money on the car, your lender may need you to purchase full coverage auto insurance. And you may need to have gap insurance to help pay for the price difference between the amount you owe and the lesser value of your car.

Liability covers you for accidents you cause, but full coverage protects you in other important ways as well. If you own your car outright, the choice can be up to you to set the coverage limits that best protect you and your family. Keep in mind that each state has its own laws on the minimum amount of liability coverage you’ll need to have.

Is Full Coverage Worth It?

Full coverage is typically made up of collision and comprehensive coverage and can include rental reimbursement and emergency roadside coverage, as well. If your car is worth a lot of money, full coverage can help protect your finances if you’re involved in a major accident, even if it's paid off. If you decide to pick up only the minimum amount of liability insurance required by your state, you could save in the short term, but you may wind up paying thousands more if several vehicles are damaged in an accident and you're found at fault.

Minimum liability coverage, which covers you for damages and accidents you cause, is base coverage, at best. But here's the good news: you’re able to increase that coverage and better protect everything that matters most. Let’s explore why full coverage car insurance is a good idea even if you don't owe anything on your car.

Basic, state-mandated car coverage

Most states require some form of automobile insurance. They typically require these types of coverage:

• Uninsured or underinsured motorist coverage
• Property damage liability insurance
• Bodily injury liability insurance
• Personal injury protection
• Medical payments

Full coverage automobile insurance

Full coverage insures you better than basic coverage. This coverage usually contains a more robust set of auto insurance policies. Together, these policies offer more complete coverage, when compared against basic minimum insurance that states require, and usually include:

• Comprehensive insurance
• Collision coverage
• Rental car reimbursement protection
• Emergency roadside assistance

Does Full Coverage Include Liability?

Liability coverage is the foundation of most car insurance policies. Depending on where you live, full coverage usually includes either medical payments coverage (Medpay) or personal injury protection (PIP). This coverage would pay for medical bills that resulted from a covered accident — up to the policy limit. It’s important to be aware that Medpay or PIP is required in most states, but not in all of them. So check with your agent about your state’s legal requirements to learn how full coverage is mandated there.

What Is Not Included in Liability and Full Coverage?

Even if you’ve got full coverage, there are certain situations where you may not be insured. For instance, your own medical bills are not covered under full coverage. Suppose a driver with basic liability coverage is at-fault in an accident and injures you. Your uninsured or underinsured motorist coverage can help to take care of your medical bills in that case.

When comparing full coverage vs. comprehensive and collision insurance, it’s important to consider the entire, bundled product. Many important insurance policies that are grouped together to make up a full coverage package. We’re an insurance company that offers a wider array of options with full coverage like rental car reimbursement coverage and 24/7 emergency roadside assistance.

If your car’s damaged due to a covered loss and it’s going to be in the shop for a while, you’ll be glad you’ve got help with financing a rental car. And if you unexpectedly break down on a road trip, emergency roadside assistance can really save the day.

Full Coverage vs. Liability Cost

When thinking about the liability vs. full coverage price difference, keep in mind that you’re getting a lot more with full coverage. Even though you’ll have some coverage with basic liability insurance, it may not be enough to protect you if you cause an accident. 

Costs of both insurance options can shift according to your zip code and your insurance rating. And because state-mandated minimum coverage differs from one state to the next, coverage costs will vary as well.

If you're found liable for a car accident, damages to buildings and vehicles can escalate into the thousands of dollars. And if anyone was injured, you may be required to pay their lost wages in addition to their medical bills. Full coverage can help you afford to pay for these damages and can protect more of your hard-earned savings.

When you consider the price difference between basic liability and full coverage, the extra expense can translate into real peace of mind that comes with full coverage insurance. And it can really help you to feel more confident behind the wheel. Be sure to check in with your American Family Insurance agent (Opens in a new tab) to learn about your coverage options. They can carefully insure you with a policy that works best to protect everything you've worked so hard for.