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What each option covers
| Situation | Liability only | Full coverage |
|---|---|---|
| You injure another driver | Covered up to your limit | Covered up to your limit |
| You damage another car or property | Covered up to your limit | Covered up to your limit |
| Your car is damaged in a crash you caused | Not covered | Covered by collision, minus deductible |
| Your car is stolen, flooded or hit by hail | Not covered | Covered by comprehensive, minus deductible |
| A tree falls on your parked car | Not covered | Covered by comprehensive |
| You hit a deer | Not covered | Covered by comprehensive |
Liability limits are written as three numbers. 50/100/50 means $50,000 per injured person, $100,000 total injuries per accident and $50,000 for property damage. Full coverage policies are usually quoted with higher limits, such as 100/300/100, because people who protect their own car also tend to protect their savings.
Neither option automatically includes uninsured motorist cover or medical payments, although some states require them. Those protect you when the other driver can’t pay, and are inexpensive additions worth considering.
The cost difference
In CarInsurance.com’s 2026 data, a 40-year-old with a clean record paid on average $2,578 a year for full coverage, $829 for liability-only at 50/100/50 and $738 for the bare state minimum. That makes collision and comprehensive worth roughly $1,750 a year for an average car. On a new car, that’s a reasonable price to protect a large asset. On a 12-year-old car worth $4,000, it may be close to half the car’s value every year.
State minimum limits
| State | Minimum liability | Other requirements |
|---|---|---|
| California | 30/60/15 (from Jan 2025) | – |
| Texas | 30/60/25 | – |
| Florida | $10,000 property damage | $10,000 personal injury protection |
| New York | 25/50/10 | PIP and uninsured motorist |
| Pennsylvania | 15/30/5 | Medical benefits (first-party) |
| Illinois | 25/50/20 | Uninsured/underinsured motorist |
| Georgia and Ohio | 25/50/25 | – |
| North Carolina | 50/100/50 (from Jan 2025) | Uninsured motorist |
| Michigan | 250/500/10 default (50/100/10 option) | PIP; property protection |
| New Hampshire | No insurance mandate | Must show financial responsibility |
Sources: Insurance Information Institute table (July 2024), State Farm on California SB 1107. Requirements change; confirm with your state insurance department.
State minimums are low compared with real accident costs. A single serious injury can exceed $30,000 in medical bills, and anything above your limit can be claimed from you personally. That’s why many advisers suggest 100/300/100 for anyone with a home or savings, even on a liability-only policy.
When to drop collision and comprehensive
MoneyGeek’s guidance uses a few simple tests. Consider dropping full coverage when most of these are true:
- The 10% rule: your annual collision and comprehensive premium is more than 10% of the car’s value. Paying $900 a year to insure a $6,000 car fails this test.
- The car is worth less than about $7,500. Older guidance used $5,000, but used car values have risen.
- The car is paid off. Lenders and leasing companies require both coverages until the loan ends.
- You could afford to repair or replace the car from savings without hardship.
Remember that a claim pays the car’s actual cash value minus your deductible. If your car is worth $3,000 and your deductible is $1,000, the most you could ever collect is $2,000. Average claims run about $5,400 for collision and $2,500 for comprehensive, so on a low-value car the payout is capped well below what you’d expect.
Middle-ground options
- Keep comprehensive, drop collision. Comprehensive is usually much cheaper and protects against theft, hail and animal strikes.
- Raise the deductible. Moving collision from $500 to $1,000 typically saves $100 to $200 a year.
- Lower physical damage, raise liability. Use some of the savings to buy higher liability limits.
If you’re financing a new car with a small down payment, you may also need gap insurance. To compare prices for either option, see our 2026 rates guide.
Frequently asked questions
Is full coverage required by law?
No. States require liability insurance (and in some cases PIP or uninsured motorist cover). Collision and comprehensive are only required by lenders and leasing companies.
How much more is full coverage than liability?
About $1,750 a year more on average in 2026: $2,578 for full coverage versus $829 for 50/100/50 liability-only (CarInsurance.com).
Can I drop full coverage if I still have a car loan?
Generally no. Your loan agreement will require collision and comprehensive, and the lender can buy expensive force-placed coverage and add it to your loan if you drop it.
Does liability insurance cover my car if someone else hits me?
Your liability cover doesn’t, but the at-fault driver’s liability insurance should pay. If they’re uninsured, you need uninsured motorist property damage or collision cover.
What liability limits should I choose?
State minimums are the legal floor. Many advisers suggest at least 100/300/100 if you own a home or have savings, plus umbrella cover for high net worth.
Sources
- CarInsurance.com – How much is car insurance? (Aug 2026)
- MoneyGeek – When to drop collision and comprehensive coverage (Oct 2026)
- Insurance Information Institute – Auto financial responsibility limits by state (July 2024)
- State Farm Newsroom – California’s new auto liability minimums (SB 1107)
- CarInsurance.com – Cheapest car insurance (Sept 2026)
- GEICO – Gap insurance coverage
- Insurify – Average car insurance rates, October 2026
Insurance prices, discounts and rules change often and vary by state. Figures were checked in October 2026; confirm details with the insurer or your state insurance department.