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Full Coverage vs. Liability

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Looking for Auto Insurance Coverage? Welcome to San Tan Insurance! We work with many Auto Insurance companies serving all of Arizona, and are located in downtown Gilbert.

Call (480) 391-3883 for a quote to insure your Auto vehicles and property.

We research the best Auto Insurance rates and coverage options.

Only two states in America do not have a motor vehicle insurance requirement: New Hampshire and Virginia. Even they, though, have personal responsibility requirements. In Arizona, auto insurance is required. Even if it were not, though, car insurance is a smart investment. It protects you, your passengers, and your vehicle in the event of an accident. There are two basic types of auto insurance: full coverage and liability only. Understanding the difference helps you make the right choice for your unique needs.

What is Liability Insurance?

“Liability only” auto insurance is what it sounds like; it provides coverage for the other driver’s damages in the event you are liable for an accident. In most states, liability insurance is the minimum required by law. Even then, states have minimum amounts of coverage. These numbers typically read as something like 25/50/15. The first number indicates how many thousands of dollars in medical coverage for a single person. The second is how many thousands for every person in the accident. The third indicates thousands of dollars to reimburse property damage. In the event you exceed any of these limits, you are responsible for the difference.

In Arizona, the minimum requirement is liability coverage of 15/30/10. Obviously, these numbers are low. If you have only the legal minimum in auto insurance and are at fault for an accident, you will likely face significant out of pocket costs, especially regarding the property damage portion. The reality is that $10,000 is not enough to replace most vehicles in the event of a total loss. Also, remember that liability only coverage means that you are responsible for repairing or replacing your own vehicle and covering any medical bills acquired due to the accident.

What is Full Coverage Insurance?

Full coverage insurance protects your vehicle for both comprehensive and collision damage. This means you have coverage for accidents with another car or object, vandalism, theft, and weather damage. Additionally, full coverage insurance includes liability insurance. If you have an accident and are at fault, this policy covers the costs of both you and the other party.

Full coverage includes numerous options, such as rental reimbursement, additional medical coverage, life insurance, towing fees, and uninsured/underinsured motorist. You may choose your amounts, as listed above, for both the personal coverage portion and the liability coverage portion.

If you make car payments, most lien-holders require full coverage auto insurance. Therefore, even though this type of insurance is not required in the state of Arizona, whoever provides your auto loan likely mandates it.

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Benefits to Having Full Coverage

Maintaining full coverage on your vehicle once you have obtained clear title may seem like an unnecessary expense if you have never had an accident, car theft, or any other type of claim. However, consider what your car represents: a significant investment. Consider as well how much you rely on your vehicle, especially in Arizona with its less-than-stellar public transportation system. Do you drive to work? Run errands? Visit friends or relatives? Paying for repairs, or replacing your car in the event of a total loss, represents an enormous expense. One busted headlight runs into hundreds of dollars on newer vehicles.

Another thing to remember: Arizona has no law requiring uninsured/underinsured motorist coverage. You may have an accident where you are not liable but the other person’s insurance does not cover your expenses. Yes, you can sue for those monies, but while you are waiting for that suit to settle, you have car repairs and medical bills. Uninsured motorist coverage protects you in this situation.

Of course, you will likely want to adjust your coverage as the car depreciates. No matter how much coverage you choose, the insurance company will only reimburse you what your car was worth just before the accident, not what it costs to replace it. If you paid $30,000 for it new but the KBB value on it at the time of the wreck was $10,000, you only receive $10,000. So stay up-to-date and adjust your coverage amounts accordingly.

Should You Ever Drop Full Coverage?

Again, once the car is paid in full, maintaining full coverage is a choice. You may opt not to make that choice if you decide the value of the vehicle is no longer worth the cost of insuring it. As stated above, reimbursement is only equal to the car’s value, not what it would cost to buy another car. If the vehicle is worth only a few thousand dollars, you may decide the money you spend on full coverage insurance is better spent going into a savings account to buy a new car.

Do not base your decision on the fact that you have never had an accident, as accidents can happen at any time. They are one of the few things you cannot use history to predict.


Consider carefully the overall costs of full coverage and liability insurance when deciding between them. When you do opt for full coverage, look at the numerous options and add-ons. Some are definitely worth the extra cost in your premium. Do not forget to adjust your coverage amounts as your vehicle depreciates. Yes, there are scenarios when full coverage is unnecessary, just not many of them.