The Price Gap Between Liability and Full Coverage Auto Insurance
If you’ve ever shopped for car insurance, you’ve probably noticed a significant price difference between liability-only insurance and full coverage insurance. But how much cheaper is liability than full coverage? The short answer: Liability-only insurance can be 50% to 80% cheaper than full coverage, depending on factors like your location, driving history, and vehicle type. However, the cost savings come at the expense of protection. In this guide, we’ll dive deep into why liability insurance is more affordable, whether it’s the right choice for you, and how to strike a balance between cost and coverage.
The Key Differences Between Liability-Only and Full Coverage Insurance
Before understanding the price difference, it’s essential to know what you’re paying for with each type of policy.
What is Liability-Only Insurance?
Liability-only car insurance covers damages and injuries you cause to others in an accident. This includes:
- Bodily Injury Liability (BIL) – Pays for medical expenses of other parties if you’re at fault.
- Property Damage Liability (PDL) – Covers repairs for damage you cause to another person’s car or property.
Most states require a minimum liability coverage, which varies by location. However, liability insurance does not cover:
- Your own medical expenses
- Repairs to your vehicle
- Damage caused by uninsured drivers
- Non-accident-related damage (theft, vandalism, natural disasters)
What is Full Coverage Insurance?
Full coverage auto insurance includes liability insurance plus additional protection for your vehicle. It typically includes:
- Comprehensive Coverage – Covers non-accident damage (e.g., theft, fire, vandalism, storms).
- Collision Coverage – Pays for damage to your vehicle if you hit another car or object, regardless of fault.
- Uninsured/Underinsured Motorist Coverage – Protects you if an uninsured driver hits you.
- Medical Payments or Personal Injury Protection (PIP) – Covers medical expenses for you and your passengers.
How Much Cheaper is Liability Than Full Coverage?
Average Cost Comparison
According to Quadrant Information Services, the average cost of car insurance varies widely based on coverage level, state, and personal factors. Here’s a general breakdown:
| Coverage Type | Average Annual Cost (Nationwide) |
| Liability-Only | $500 – $900 |
| Full Coverage | $1,200 – $2,500 |
On average, liability-only insurance is at least 50% cheaper than full coverage, but the exact difference depends on factors like vehicle type, credit score, and accident history.
Factors Affecting Cost Differences
- State Minimum Requirements – Some states have very low liability limits, making liability insurance even cheaper.
- Vehicle Value – The more expensive your car, the higher the cost of full coverage.
- Driving History – A clean driving record can lower the cost of full coverage, but high-risk drivers see a larger price gap.
- Credit Score – A poor credit score can increase full coverage costs significantly.
- Age and Experience – Younger and inexperienced drivers face higher full coverage rates.
- Location – High crime rates and dense populations raise insurance costs, especially for full coverage.
Is Liability-Only Insurance the Right Choice for You?
Choosing between liability-only and full coverage depends on multiple factors, including risk tolerance, financial security, and the value of your car.
When Liability-Only Insurance Makes Sense
You should consider liability-only insurance if:
- Your car is older or has a low market value (typically under $4,000)
- You can afford out-of-pocket repair costs for your vehicle
- You have significant savings and can handle unexpected expenses
- You drive a second or backup car that you rarely use
- You want the lowest insurance premium possible
When Full Coverage is a Better Option
Opt for full coverage if:
- You have a newer, high-value, or financed vehicle
- You rely on your car daily and cannot afford repairs or replacement
- You live in a high-risk area for theft, vandalism, or extreme weather
- You want peace of mind knowing your vehicle is protected
- You have a history of accidents or live in a state with high uninsured motorist rates
How to Reduce the Cost of Full Coverage Insurance
If full coverage is the better choice for you but seems too expensive, there are ways to lower your premiums:
- Increase Your Deductible – A higher deductible means lower monthly payments.
- Bundle Policies – Combine auto and home insurance for discounts.
- Maintain a Clean Driving Record – Avoiding accidents and traffic violations keeps rates low.
- Improve Your Credit Score – A higher score can result in lower insurance costs.
- Compare Quotes – Shopping around can help you find the best rates.
- Take Advantage of Discounts – Many insurers offer discounts for good drivers, students, and military personnel.
Final Thoughts
So, how much cheaper is liability than full coverage? In most cases, liability-only insurance is at least 50% cheaper, but the actual difference depends on factors like location, driving history, and vehicle type. While liability insurance is a budget-friendly option, it leaves your own vehicle unprotected in an accident. If you can afford potential repair costs, liability-only may be a smart financial move. However, if your car is valuable or you want peace of mind, full coverage is worth the extra cost.
Before deciding, compare quotes, evaluate your financial situation, and consider how much risk you’re willing to take on. The right choice will depend on your personal circumstances and priorities.
Related FAQs
- Why is full coverage insurance more expensive?
- Full coverage includes additional protections like comprehensive and collision coverage, making it more expensive than liability-only insurance.
- Is liability-only insurance enough?
- It depends on your financial situation and car value. If your vehicle is old and inexpensive to repair, liability-only may be sufficient.
- How does my driving record affect insurance costs?
- A clean driving record lowers insurance rates, while accidents and traffic violations increase costs, especially for full coverage.
- What is the cheapest liability-only insurance company?
- Companies like GEICO, State Farm, and Progressive often offer competitive liability-only rates.
- Does liability insurance cover theft or vandalism?
- No, liability insurance only covers damages you cause to others. You need comprehensive coverage for theft and vandalism.
- How much does liability-only insurance cost per month?
- On average, liability-only insurance costs between $40 to $75 per month.
- Will dropping full coverage save me money?
- Yes, but consider whether you can afford repairs or replacement if your car is damaged.
- Can I switch from full coverage to liability-only?
- Yes, but make sure it’s the right choice based on your car’s value and financial situation.
- Is full coverage required by law?
- No, but if you finance or lease a car, lenders usually require full coverage.
- Does liability insurance cover passengers in my car? No, you’ll need medical payments coverage or personal injury protection (PIP) for that.
How Ontario Insurance Can Help You Choose Between Liability and Full Coverage
Navigating the decision between liability-only and full coverage can be overwhelming. At Ontario Insurance, we understand that every driver’s needs are unique. Our experienced advisors are here to help you evaluate your options, understand the cost differences, and select the right policy that suits your budget and lifestyle. Whether you’re looking to save on premiums or seeking comprehensive protection, we’ve got you covered.
