Liability vs. Full Coverage: What Is the Difference?

Ask ten drivers what "full coverage" means and you may get ten answers. Insurers do not sell a single product by that name. In everyday use, it describes a policy that combines liability coverage with protection for your own vehicle. Knowing exactly what is included helps you compare quotes fairly.

What liability coverage does

Liability coverage is the foundation of nearly every auto policy and the part most states require. It pays when you are legally responsible for an accident that hurts someone else or damages their property. It has two main parts.

• Bodily injury liability helps pay for the other party's medical costs, lost income and similar claims, and often for your legal defense.
• Property damage liability helps pay to repair or replace the other driver's vehicle or other property you damaged, such as a fence or a mailbox.

Liability never pays to fix your own car or treat your own injuries. If you are at fault in a single-car crash and carry only liability, the repair bill is yours.

What people usually mean by full coverage

When someone says full coverage, they typically mean three things together: liability, collision and comprehensive.

• Collision helps pay for damage to your car from a crash with another vehicle or an object, regardless of who was at fault.
• Comprehensive helps pay for damage from events other than a crash, such as theft, vandalism, fire, falling objects, flooding or hitting an animal.

Even with all three, "full" is a bit of a misnomer. Your policy still has limits and deductibles, and it may not include extras like rental reimbursement or roadside help unless you add them.

When liability-only may make sense

Some drivers reasonably choose to carry only the required liability coverage, particularly when a vehicle is older and worth relatively little. A common rule of thumb is to compare the yearly cost of collision and comprehensive with what the car is worth, and consider whether you could replace the vehicle from savings. This is a financial decision, not a rule, and an agent can help you weigh it.

When you will probably need more than liability

• You are financing or leasing the car. Lenders and lessors commonly require collision and comprehensive, and sometimes a maximum deductible.
• The car is newer or would be hard for you to replace out of pocket.
• You park outdoors or live where theft, hail, flooding or wildlife collisions are a concern.

Coverages that often get overlooked

Neither liability nor "full coverage" automatically includes everything that protects you. Consider asking about uninsured and underinsured motorist coverage, medical payments or personal injury protection, rental reimbursement, and roadside assistance. Availability and rules vary by state.

How to compare quotes correctly

A cheaper quote is not necessarily a better deal if it leaves out coverage. When you compare, line up the same liability limits, the same deductibles and the same optional coverages. Our guide to comparing auto insurance quotes walks through this step by step.