Should I Get Minimum or Full Coverage?

The double-edged sword of auto insurance is if you are too broke to afford it, you are too broke to not have it. Even if it isn’t legally required, having it prevents you from being sued as an individual should anything happen. 

Auto insurance companies vary significantly in what they offer and how much they cost, but one thing is sure: it is cheaper to have auto insurance than it is if you were to be fined (or jailed) for not having it at all. The only thing to do is decide whether you should get minimum coverage or full coverage for you and your vehicle.

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      What is minimum coverage?

      The other name for minimum auto insurance coverage is liability insurance. As the name suggests, this is to cover any damage you, the driver, may cause to others on the road. The liability insurance may include the repair costs for other vehicles, the cost for a rental car for the other driver to use while theirs is in repair or the price of medical care for those injured (should you be found at fault).

      All U.S. states require the minimum of auto insurance except for New Hampshire, South Carolina, and Virginia. In those states, drivers can choose to pay a flat fee every year to bypass buying insurance. It does not absolve drivers in those states of financial responsibility if they damage others on the road. The other 48 states require liability insurance because it benefits all parties. 

      What does minimum coverage cover? 

      Liability auto insurance is often referred to as the coverage level 25/50/25, meaning it will cover $25,000 per person injured with a maximum of $50,000 and $25,000 damage coverage. This type of coverage is the average minimum allowed in most of the United States. When shopping for liability insurance, keep those three numbers in mind. The offered minimum coverage is for injuries per person involved, the total injury coverage for each accident you may be in, and covering the damage to any property damage for each accident.

      What is full coverage? 

      The first thing to know is the term is a bit deceptive. The two parts to full coverage are collision and comprehensive. Full coverage auto insurance doesn’t mean that all people, property, and vehicles are due for money if you are in an accident. It is a bit more complicated than that. It also costs more. 

      Do you need it? It comes down to doing the math. Every year cars drop about 10%–15% in value. Factor in the wear and tear, mileage and its age to determine if the value of full coverage protection makes fiscal sense. Average your vehicle’s current Blue Book value, figure out the cost difference between liability and comprehensive for it, and it will guide you.

      [ Read: The Best Car Insurance Companies ]

      What does full coverage cover?

      Full coverage consists of two halves of the same coin: comprehensive insurance and collision insurance. The value each of these have depends on the depth of coverage you choose. Collision insurance is typically for damages incurred while driving, such as driving off the road and hurting your vehicle or yourself, hitting something in the street, damaging any other cars, etc. Comprehensive insurance is for any damage to your car or truck when you are not driving it, such as theft, weather damage and other extraordinary circumstances would be under that umbrella. 

      You should get full coverage auto insurance if you can readily afford it, and it makes sense for you fiscally. It feels good to know you have that at your back to help.

      Is minimum coverage the cheapest? 

      Speaking in general terms, yes. Minimum coverage is cheaper. Liability costs can be very low per month depending on where you live and what you drive. However, it is a case of banking in the future. If you drive very little, live rurally or have an excellent driving record then the minimal cost is all you need to pay. The same is true if you have an ancient vehicle and would not get much from insurance with full coverage if it is totaled out. It costs more if you cause a massive accident with multiple injuries and the costs exceed your coverage, which means people may sue you and not your insurance.

      As of August 2020, the average cost of liability insurance is $112 per month.

      [ Read: Best Cheap Car Insurance Companies ]

      How much does full coverage cost? 

      Full coverage auto insurance costs an average of $1,555 per year or around $130 per month. 

      You also have to pay a deductible before the coverage kicks in. That amount is typically between $500 or $1,000. Generally speaking, the lower your deductible, the higher your premiums will be, and vice versa. 

      Your own cost for this varies wildly with some factors being:

      • Age
      • Location
      • Driving record
      • Arrest record
      • Credit score
      • How many vehicles on the policy

      [ Read: What’s the Average Cost of Car Insurance in the U.S.? ]

      Who needs minimum vs full coverage? 

      If the value of your car is less than 50% of its original value, or if the cost of full coverage insurance is more yearly than the vehicle is worth in total, liability is probably the way to go for you. If it is under five years old and you are still making payments, you may need full coverage. Many factors come into play. Here is how you decide:

      1. Figure out how many people and vehicles will be covered under the policy. 
      2. Make a list of the vehicles’ makes, models, years and mileage.
      3. Make a list of the ages of the drivers covered under the policy, including the list above with credit scores, records, etc.
      4. Consider bundling your minimum or full coverage insurance policies with your home or renters insurance in order to maximize value and create a more attractive package for companies to mollify their risk.
      5. Speak to several insurance agents to get the best bang for your buck.

      We welcome your feedback on this article. Contact us at with comments or questions.

      Nicky LeMarco

      Contributing Writer

      Nicky LaMarco is a business and finance writer who has written for Interest, Bizfluent and Houston Chronicles.

      Reviewed by

      • Nashalie Addarich
        Nashalie Addarich
        Insurance Editor

        Nasha Addarich is an editor at The Simple Dollar and a former attorney who specializes in home insurance, auto insurance, life insurance, and savings. She is a former contributing editor to