Full coverage vs. liability only car insurance: what's the difference?

When you shop for car insurance, one of the first choices you make is whether you want liability only or full coverage. Both can be the right call.

The difference comes down to one question: if your car gets wrecked, stolen or damaged, who pays to fix it? With liability only, that is on you. With full coverage, your policy can help.

This guide explains what each option pays for, shows them side by side, and walks through when each one tends to make sense. If you want a deeper look at any single coverage, we link to those guides along the way.

What does liability only car insurance cover?

Liability coverage pays for injuries and damage you cause to other people in an accident that is your fault. It has two parts:

• Bodily injury liability helps pay the other driver's and passengers' medical bills and some related costs.
• Property damage liability helps pay to repair the other person's car or property, like a fence or a mailbox.

Liability is the coverage every state in this guide requires you to carry. What it does not do is pay for your own car. If you cause a crash, your liability coverage pays the other driver, and your own repairs come out of your pocket. For the full breakdown, read our guide to liability car insurance and how much you need.

What does full coverage car insurance cover?

"Full coverage" is not one single coverage. It is a common way to describe a policy that combines three things:

• Liability, which meets your state's legal requirement.
• Collision, which helps pay to repair or replace your car after a crash with another car or an object, no matter who caused it. Learn more in our collision insurance guide.
• Comprehensive, which helps pay when your car is stolen or damaged by something other than a crash, such as hail, flood, fire, a fallen tree or vandalism. See our comprehensive car insurance guide.

Collision and comprehensive usually come with a deductible. That is the amount you pay before the coverage kicks in. A higher deductible usually means a lower premium, but more out of pocket after a claim. Many full coverage policies also add options like uninsured motorist coverage, medical payments or rental reimbursement. "Full" does not mean everything is covered, so it is always worth reading what your policy includes. You can compare options on our full coverage auto insurance page.

Full coverage vs. liability only: how do they compare?

Here is a quick side-by-side look at what each option pays for.

In short, both options protect other people from the damage you cause. Only full coverage also helps protect your own car.

When can liability only car insurance make sense?

Liability only is often a fit when your car is paid off and its value is low. Ask yourself a few questions:

• Is your car paid off? If you own it outright, no lender is telling you what coverage to carry.
• What is it worth? With an older car, a collision or comprehensive payout may not be much more than your deductible. In that case, the extra premium may not be worth it.
• Could you handle a big repair or replace the car? If losing the car would leave you without a way to get to work, that is a reason to think twice.
• Where do you park and drive? If theft, hail or flooding are common where you live, comprehensive can be worth a look even on an older car.

There is no one right answer. Some drivers with older cars keep comprehensive only, because it often costs less than collision and still covers theft and weather. Talk it through with an agent before you drop anything.

When is full coverage usually required?

If you are still paying off a car loan or you lease your car, full coverage is usually required. The car is collateral for the loan, so the lender wants it protected. The Texas Department of Insurance explains that if you still owe money on your car, your lender will require collision and comprehensive. If you drop them, the lender can buy coverage that protects only the lender and add the cost to your loan payment.

Leasing companies usually set their own coverage rules too, sometimes with specific liability limits and deductible caps. Check your loan or lease contract to see exactly what it asks for. If your car would be worth less than you owe, ask about gap insurance as well.

Is state minimum liability enough?

State minimums are the least you can legally carry, not a recommendation. A serious crash can cost more than minimum limits pay, especially if several people are hurt or a newer car is totaled. If the damage goes over your limits, you could be responsible for the rest. Many drivers choose higher liability limits for more protection, whether they pick liability only or full coverage.

Rules vary by state

Texas, California and Arizona each set their own minimum liability limits. These are the minimums for a standard personal auto policy:

• Texas: 30/60/25. That means $30,000 for injuries per person, $60,000 per accident and $25,000 for property damage. Source: Texas Department of Insurance. The same TDI guide explains lender requirements for collision and comprehensive.
• California: 30/60/15. That means $30,000 for injury or death to one person, $60,000 for more than one person and $15,000 for property damage. The California DMV also notes that comprehensive or collision insurance does not meet the state's financial responsibility requirement on its own. Source: California DMV insurance requirements.
• Arizona: 25/50/15. That means $25,000 for injury or death to one person, $50,000 for two or more people and $15,000 for property damage, for policies issued or renewed starting July 1, 2020. Source: Arizona Revised Statutes 28-4009.

Rules can change, and your situation can add requirements, such as an SR-22 filing. Check the state source or ask a licensed agent to confirm what applies to you.

How A-MAX can help

Not sure whether liability only or full coverage fits your car and your budget? A licensed, bilingual A-MAX agent can walk you through both and show you the numbers side by side. We shop. You choose.

Walk into one of our 240+ offices in Texas, California and Arizona, call 1-800-921-AMAX, or start a quote online to see your options. A-MAX Has Your Back.