Yes, comprehensive insurance is cheaper than liability insurance – comprehensive insurance costs $162 per year on average, while liability costs an average of $716 per year. Getting comprehensive insurance alone can be difficult, though, as you typically need to buy a full coverage policy to get comprehensive coverage. Full coverage is more expensive than liability insurance because it includes comprehensive and collision insurance, as well as your state’s minimum coverage requirements.
Cost of Liability Insurance vs. Full Coverage by Company
Note: Premiums are representative of a 45-year-old good driver in California; individual premiums will vary.
Comprehensive insurance covers damage to your vehicle caused by non-moving events, such as falling objects, fire, theft, or vandalism. Liability insurance covers other drivers’ medical expenses and property damage from an accident you caused.
If you plan on driving your vehicle, comprehensive insurance cannot replace liability insurance because liability insurance is required by almost every state while comprehensive coverage is not required by any states. Furthermore, comprehensive-only policies are not offered by every insurer and are only available for cars in long-term storage.
Liability insurance is 64% cheaper than full coverage, on average. Liability car insurance costs an average of $720 per year, while full coverage car insurance averages $1,997 per year, according to WalletHub data for 2021. The exact cost difference between liability and full coverage insurance depends on factors such as the driver’s state, vehicle, and driving history.… read full answer
Full Coverage vs. Liability Insurance Cost by Company
Note: Rates reflect average annual costs in California.
Why Full Coverage Is More Expensive Than Liability Insurance
Full coverage insurance is more expensive than a liability-only policy because it offers broader protection. Liability insurance only pays for other people’s repair expenses and medical bills after accidents that you cause. On the other hand, full coverage includes liability insurance plus collision and comprehensive coverage, which pay to repair or replace your vehicle after an accident or other damage-causing event.
You should have liability-only insurance if the annual cost of full coverage exceeds 10% of your car’s value. At that point, the extra coverage might not be worth the added cost of paying for more than liability-only insurance. But this is just a general rule of thumb, and the decision to switch to liability-only insurance depends on state coverage requirements and each driver’s financial situation.… read full answer
When Liability-Only Insurance Is Worth It
The main advantage of liability-only insurance is that you’ll save on your premium. Since liability insurance offers minimal protection for the policyholder, it is less expensive than full coverage insurance.
However, if your car is damaged by an accident that you cause or another damage-causing event, then you’ll have to pay for the repairs out of pocket. If you have the financial means to pay for repairing or replacing your car, and your state doesn’t require you to have any other types of insurance, then you could take the risk of switching to liability-only insurance.
Liability-Only Insurance & State Coverage Requirements
Liability only insurance pays for other people’s property damage and injuries resulting from accidents that you cause. Almost every state requires that drivers carry a certain amount of liability insurance.
If your state allows it, then you’ll need to decide whether to purchase liability-only insurance or full coverage. Full coverage insurance generally refers to a policy that includes both collision and comprehensive coverage. Collision insurance covers damage to your vehicle after an accident. Comprehensive coverage, on the other hand, pays to repair or replace your car if it’s damaged by something other than an accident, like vandalism or a natural disaster.
If your car is leased or financed, you will likely be required to carry full coverage insurance. Even if your car is paid off, you shouldn’t purchase liability-only insurance if your vehicle is still worth a lot or you’re not in the financial position to pay to repair or replace it. Liability-only insurance could also be risky if you live a high-traffic area where your vehicle is more likely to be damaged.
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