Liability vs. full coverage: what is the difference?

Start with liability

Liability coverage is about damage or injuries you cause to another person. A policy usually separates bodily-injury liability from property-damage liability, with limits that describe how much the insurer may pay for a covered claim.

The exact limits you need can depend on state rules, your assets, your vehicle, and your comfort with risk. A licensed professional can help you evaluate those tradeoffs.

What people often mean by full coverage

“Full coverage” is a casual phrase, not a single coverage type. People often use it to describe liability plus collision and comprehensive coverage. Those coverages address different kinds of loss to your own car.

Collision generally addresses crash damage. Comprehensive generally addresses many non-collision losses, such as theft, weather, or animal damage. Deductibles and exclusions still apply.

Questions to ask before changing coverage

Instead of asking whether a policy is full coverage, ask what each coverage does, what its limit or deductible is, and which losses are excluded.

• Would a claim payment be enough to repair or replace the vehicle?
• What would I pay out of pocket before coverage responds?
• Is there a lender or lease requirement for the vehicle?
• Which choices are required by my state and which are optional?