Choosing the right auto insurance policy isn’t just about price—it’s about financial protection, risk exposure, and how much you can afford if an accident happens. Many drivers compare liability vs full coverage auto insurance without fully understanding what each option actually pays for. The difference can impact your car insurance rates, out-of-pocket costs, and long-term financial security. Below, we break down how each policy works, what affects premiums, and how to choose the right coverage for your situation.