What "full coverage" usually means
No policy is literally "full." The term is shorthand, commonly used by lenders and shoppers, for a policy that includes:
- Liability for injuries and damage you cause to others (required in almost every state)
- Collision for damage to your car from a crash
- Comprehensive for theft, weather, fire, vandalism and animal strikes
Depending on the state and your choices, it may also include uninsured motorist, medical payments or personal injury protection, rental reimbursement and roadside assistance. Even full coverage has limits, deductibles and exclusions, so check your declarations page.
Side-by-side comparison
| Situation | Liability only | Full coverage |
|---|---|---|
| You cause a crash and damage another car | Covered up to your limits | Covered up to your limits |
| You cause a crash and damage your own car | Not covered | Covered by collision, minus deductible |
| Your car is stolen | Not covered | Covered by comprehensive, minus deductible |
| Hail or a falling tree damages your car | Not covered | Covered by comprehensive |
| You hit a deer | Not covered | Covered by comprehensive |
| An uninsured driver hits you | Depends on uninsured motorist coverage | Collision or uninsured motorist coverage may apply |
| Required by a lender or lease | Doesn't meet the requirement | Usually meets it, with a capped deductible |
What NAIC data shows about the cost difference
NAIC's national figures give a sense of scale. The average liability premium is about $737 a year, while the combined average for liability, collision and comprehensive is about $1,439. Collision averages about $464 and comprehensive about $238 for cars that carry them.
For any single car, the difference depends on the vehicle's value and repair costs, your deductibles and where you live. Newer, more expensive cars cost more to cover; older, lower-value cars cost less, but they also have less value to protect. Use the premium estimator to compare coverage levels for your state and vehicle type.
When liability-only can make sense
Consider dropping collision and comprehensive when most of these are true:
- The car is paid off, so no lender requires physical damage coverage.
- The car's market value is low.
- You could repair or replace it from savings without hardship.
- The yearly cost of collision and comprehensive is large compared with what you'd collect after a total loss, once you subtract your deductible.
A practical way to check: look up your car's current market value and subtract your deductible. That's roughly the most you'd collect if it were totaled. Compare that with what collision and comprehensive cost you each year. When the coverage costs a meaningful share of the most it could ever pay, many owners decide to drop it. You can check model-level costs in our vehicle insurance cost index.
When full coverage usually still makes sense
- You have a loan or lease; the contract almost always requires it.
- Losing the car would leave you unable to get to work and you couldn't afford a replacement.
- The car is newer or valuable.
- You live where theft, flooding or hail is common.
- You drive a lot, which raises your chance of a crash.
- You park on the street or in an area with frequent break-ins or vandalism.
Even when the math is close, some drivers keep full coverage for peace of mind, because a sudden car replacement would strain their budget more than a predictable premium does.
Three drivers, three reasonable choices
A new car with a loan. The lender requires collision and comprehensive with a capped deductible, so full coverage isn't optional. The main decisions are the deductible amount, whether to add gap coverage, and how high to set liability limits.
A paid-off car in the middle of its life. The car still has meaningful value, and replacing it would take a big bite out of savings. Many owners in this spot keep both coverages but raise deductibles to trim the premium, then revisit the choice each year as the car's value drops.
An older, low-value car used for short trips. The most the insurer would pay after a total loss, minus the deductible, is small. The owner has an emergency fund that could cover a replacement. Dropping collision, and possibly comprehensive, can make sense here, while keeping strong liability and uninsured motorist limits.
These examples show the reasoning, not a rule. Your decision depends on your car, your savings and how much risk you're comfortable carrying.
Middle-ground options
- Keep comprehensive, drop collision. Comprehensive is usually cheaper and still protects against theft, weather and animal strikes.
- Raise your deductibles. A higher deductible lowers the premium while keeping protection against a total loss. Test the trade-off with the deductible vs. premium calculator.
- Keep people-focused coverages. Uninsured motorist, medical payments or PIP protect you and your passengers regardless of the car's value.
- Reassess yearly. Cars lose value over time, so the right answer can change at each renewal.
Whatever you choose, don't skimp on liability
Dropping collision and comprehensive only affects your own car. Liability is different: it protects your savings and future income if you injure someone. Triple-I warns that buying only state-minimum liability means you're likely to pay more out of pocket after a serious crash. Many drivers who switch to liability-only keep or even raise their liability limits. See our guide to minimum car insurance requirements for why minimums are rarely enough.
A step-by-step way to decide
- Check whether a lender or lease requires physical damage coverage.
- Estimate your car's market value.
- Find the yearly cost of collision and comprehensive on your declarations page or renewal notice.
- Decide how much you could pay out of pocket if the car were totaled tomorrow.
- Choose: keep both, keep comprehensive only, or go liability-only with strong liability limits.
Frequently asked questions
What does full coverage car insurance include?
It usually means liability plus collision and comprehensive. It may also include uninsured motorist, medical payments or PIP, and optional add-ons, depending on your state and choices.
When should I drop full coverage?
Many owners consider it once the car is paid off, its value is low and they could replace it from savings, especially when collision and comprehensive cost a large share of the car's value each year.
How much more is full coverage than liability?
NAIC national averages put liability at about $737 a year and liability plus collision and comprehensive at about $1,439. The difference for your car depends on its value, your deductibles and location.
Is full coverage required by law?
No state requires collision or comprehensive by law. Lenders and leasing companies do require them, and states require liability and sometimes other coverages.
Does liability insurance cover my car if I cause an accident?
No. Liability pays for other people's injuries and property. Damage to your own car requires collision coverage.
Related guides
- Comprehensive vs. Collision: What Each Covers and What They Don't
- Minimum Car Insurance Requirements: What "30/60/25" Means and Why It's Rarely Enough
- Car Insurance Deductibles: How to Choose Between $500, $1,000 and More
- How Much Is Car Insurance? Average Costs and What Drives Them
- Car Insurance for Leased and Financed Cars: What Lenders Require
How we estimate this
This guide explains general rules and practices. Insurance terms vary by state, insurer and policy — check your policy documents and your state insurance department for the rules that apply to you. For cost estimates, try our calculators. Read the full methodology.