Full coverage vs. liability only
"Full coverage" is not an official term. Here is what it usually means and when you can drop it.
"Full coverage" usually means liability plus collision and comprehensive. Liability-only covers damage you cause to others but nothing for your own car.
| Coverage | Liability only | "Full coverage" |
|---|---|---|
| Injuries/damage you cause others | Yes | Yes |
| Your car in a crash you cause | No | Yes (collision) |
| Theft, hail, fire, flood, animals | No | Yes (comprehensive) |
| Required by lender or lease | Not allowed | Usually required |
The 10% rule of thumb
A common guideline: if your yearly collision and comprehensive premium is more than about 10% of your car's market value, consider dropping them. For a car worth $4,000, paying $600 a year for physical damage coverage buys limited protection.
Before you drop it, ask
- Could you replace the car from savings if it were totaled tomorrow?
- Is the car paid off? Lenders and lessors require physical damage coverage.
- Do you live where hail, flooding or theft is common? Comprehensive is often inexpensive relative to that risk.
Comparing quotes? Make sure each quote includes the same coverages. A liability-only quote will always look cheaper than a full-coverage quote.
This guide is general information from AutoRateNow, not insurance, legal or financial advice. Coverage rules vary by state and insurer.