Liability vs. Full Coverage: Can I Save By Dropping One?

Auto insurance isn’t cheap, so vehicle owners sometimes weigh liability vs. full coverage. We’ve talked about the difference between the two before. Liability-only insurance covers damage to other vehicles and injuries to other people. But full coverage also includes damage to your vehicle (and sometimes medical payments coverage). But what if you chose to drop one? We’ll explain if and when it’s possible and the possible repercussions.

As of 2023, minimum liability coverage in California averages $636 per year. And for full coverage car insurance, the average is $2,291 annually.¹ Premiums can vary based on the type of vehicle you drive, your driving record, and your claims history. Coverage types,  limits, and the insurance company you choose determine your pay rate. 

Is Dropping Coverage an Option?

It would seem you’d save by keeping just liability coverage to meet your state’s minimum requirements. However, full coverage is required by most car loans and leases. It’s more expensive but covers liability, collision, and damage to your car due to accidents and other causes. Unless you purchased your car with cash or have paid it off, you probably don’t have the option to drop full coverage.

When Is It Possible To Save By Dropping Coverage?

By dropping liability coverage, and thus the minimum requirement by your state, you would be considered an underinsured or uninsured driver. There are penalties for not having liability insurance; it is part of the financial responsibility of owning a vehicle. In California, without it:

  • You can be fined
  • Your license may be suspended
  • Your vehicle may be impounded

But let’s assume your vehicle is paid off. You could now weigh liability vs. full coverage. It may be possible to drop full coverage, including collision and comprehensive coverage, if:

  • Your Vehicle Has Declined Significantly In Value: If your car is currently valued at only a few thousand dollars and your insurance deductible is high, the potential payout on a claim wouldn’t be worth it anyway.
  • You Don’t Drive the Car Much: You don’t need collision coverage if the car is being kept in storage. It only protects against theft, fire, vandalism, and water or other weather-related damage.
  • The Car Is Covered Under Another Insurance Policy: If the car is garaged at another family member’s residence, it may be covered under their policy. In this case, it makes no sense to pay a premium for another policy on it.
  • It Is an Older Car: Cars lose value with time. Insuring a car that’s 10+ years old with full coverage can mean spending close to half the car’s value annually in premiums. If the car is over 15 years old, depending on the brand/type of crash, the rate is likely to exceed its value.
  • A Driver Has No Accident History: It may be more affordable to switch to minimum coverage than to buy a new vehicle, although the tradeoff is less financial protection if your car is damaged in a future accident.

If your lender’s requirements no longer apply (you’ve paid off the loan on the car), you can consider dropping full coverage. Another consideration is how frequently covered events occur in your area. Think about the risks where you live or drive (especially with comprehensive coverage). Is a natural disaster that can damage your car likely to happen, or is there a risk of a collision with a wild animal?

If I Lease a Car, Can I Save on Insurance?

Leasing companies often have specific requirements for the type of insurance, coverage limits, and more to protect their financial interest in the car. Insuring a leased vehicle can be costlier, with the tradeoff of lower monthly payments than financing. However, if you have leased a car, you can try to reduce your auto insurance rate. Here are some ways that can work:

  • Shop around for car insurance
  • Research car insurance discounts
  • Bundle your auto policy with your home or renters insurance

You Need Car Insurance

Depending on how you purchased the vehicle, there may be no choice between liability and full coverage. But that doesn’t mean you can’t look for ways to save. Aside from meeting your state’s and lessor’s requirements, consider the protection you’ll have if you get into an accident with another driver.

Contact The Law Offices of Jacob Emrani

No matter how well-insured your vehicle is, an accident can still occur. Getting fair compensation from insurance companies that cover the cost of damage, medical bills, and lost wages is often difficult, even if you’ve chosen between liability vs. full coverage or have both. At The Law Offices of Jacob Emrani, we fight for you and are aggressive with insurers who don’t pay their fair share. Our experienced Los Angeles personal injury attorneys have won millions of dollars in damages for clients. To schedule your free consultation, call (888) 952-2952 today.



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southern california


714 W. Olympic Blvd.
Suite 300
Los Angeles, CA 90015


Our Main Location

Los Angeles

serving southern california


714 W. Olympic Blvd.
Suite 300
Los Angeles, CA 90015


(888) 508-5085