Cheap liability-only car insurance

If you find yourself at fault in a car accident, a liability-only car insurance policy is intended to cover the damages the other party incurred due to the accident. This can include damages to the vehicle, other types of property damage and medical expenses. What this type of policy does not cover, however, are the damages that occur in an at-fault accident or a non-collision loss, such as a vehicle fire or theft.

Cheapest liability car insurance

Based on our research, the companies that offer the cheapest minimum coverage nationwide are Auto-Owners and USAA, followed closely by Geico, Amica and State Farm. While these average rates are for cheap liability car insurance, based on 2023 rates from Quadrant Information Services, keep in mind that minimum coverage requirements and costs will vary based on the state where you live, since each state sets its own minimums for liability coverage.

Finding cheap car insurance is a priority for many drivers. Getting quotes from several carriers can be helpful, as it allows you to compare the price for the same coverage. And although minimum coverage is often one of the cheapest liability-only insurance policies available, due to its low limits, most insurance experts recommend that you purchase more than the minimum limits if you can afford to. If you cause an accident and the damages and injuries exceed your liability coverage limit, you will be responsible for paying the overage out of pocket. Depending on the extent of the accident, out-of-pocket costs can end up being thousands of dollars. And remember: liability insurance does not cover damages or injuries to you, your passengers or your vehicle.

However, when choosing an insurance company, there are other factors to consider in addition to price. You may also want to review a company’s customer satisfaction scores, financial strength ratings, coverage options, discounts and digital tools. Everyone has different wants and needs when it comes to insurance, so getting quotes from several carriers might help you find the right policy for you.

What is minimum coverage?

Minimum coverage refers to carrying only the minimum amount of car insurance coverage required by your state. This required coverage can vary, but almost always includes bodily injury liability coverage and property damage liability coverage, which make up liability-only insurance.

Your policy will not truly be “liability only” if you have added personal injury protection (PIP) coverage. PIP pays for medical expenses and lost wages for you and your passengers, but you still will not have coverage for your own vehicle.

Note that liability-only coverage is only an option if you own your vehicle outright. If you have a loan or lease, your lender likely requires you to have full coverage. It is also worth noting that, like “full coverage,” “liability-only coverage” is not an industry-standard term. Some companies may consider medical payments or PIP to be a part of a liability-only policy, especially if your state requires them.

Cost of liability-only car insurance

Each state has unique laws and risk levels that affect the cost of liability car insurance. Because of this, buying only minimum coverage may be significantly less expensive in some states than in others when compared to buying full coverage. For example, the average cost of car insurance for minimum coverage in Maine is $225 per year, which is $716 less than the average cost of full coverage in the state. But the average cost of minimum car insurance coverage in Louisiana is $805 per year, more than $2,104 cheaper than the average cost of full coverage in the state.

While full coverage insurance does usually cost more than minimum coverage, it provides a greater level of financial protection. Full coverage includes comprehensive coverage and collision coverage, which cover damage to your vehicle regardless of fault — something that is not included in minimum coverage.

Average annual cost of car insurance by state

How much cheaper is liability vs. full coverage?

The price difference between liability and full coverage insurance will depend partly on how much liability coverage you buy. Liability auto insurance is not one-size-fits-all. You can purchase different levels of coverage that provide you with more or less financial protection. State minimum policies provide very minimal protection, while a policy with higher limits gives you more. If you cause an accident, a liability-only policy will only pay up to your policy’s limited allowance for the injuries and damages you cause to the other car and its driver and passengers. The higher your limits, the more coverage you have and the more your insurance will likely cost.

Keep in mind that liability auto insurance never covers damage to your car. To cover damages to your car, you need full coverage car insurance, which covers your vehicle from collisions and other events, like weather or falling objects, such as trees. The difference in price is typically stark when you compare average full coverage rates with average minimum coverage rates. You might pay more than $1,000 more for full coverage than a minimum coverage policy, depending on the insurance company you choose. However, a liability-only policy with limits higher than the state minimum will likely cost more than a minimum coverage policy. In that case, the price difference may not be as significant.

Average annual cost of minimum coverage insurance vs. full coverage

If your goal is to purchase cheap liability car insurance, you might be tempted to buy just your state’s minimum limits. While this could help keep your premium down, it could cost you more money in the long run. If you cause an accident and the damages are higher than your insurance limits, you’ll be responsible for the difference out of pocket. Full coverage will typically cost quite a bit more than minimum coverage, but higher limits and adding comprehensive coverage and collision coverage could save you from unnecessary financial stress. If you’re involved in a collision with significant damages, not having enough coverage could force you to pay thousands of dollars out of pocket.

Even if your budget is tight, you might want to get an insurance quote for a few different levels of liability coverage. You could be surprised that higher limits don’t always cost much more, and you might even be able to afford full coverage. Depending on the state you live in and the insurance carrier you choose, you have the option to add just comprehensive coverage, which would provide protection in the event that your vehicle is damaged by something other than a collision. Choosing a higher deductible on a full coverage car insurance policy can also lower the cost of your car insurance, but will require you to pay more out of pocket if you file a claim.

Things to consider when purchasing liability-only car insurance coverage

Almost every state requires that you carry a minimum level of liability coverage to drive legally. However, you can purchase higher liability limits and still have liability-only car insurance. Higher limits can better protect your finances from unexpected expenses if you’re in an accident.

For example, imagine that you cause an accident in Mississippi, where you carry just the required 25/50/25 minimum limits. This means that you have $25,000 in bodily injury liability coverage per person, $50,000 in bodily injury liability coverage per accident and $25,000 in property damage liability coverage. If you cause $100,000 in total injuries, your policy will still only pay up to your $50,000 limit. You will be responsible for the other $50,000. And if you total the other party’s car to the tune of $30,000, you’ll have to pay that extra $5,000 out of pocket, too.

If you had higher limits, say 100/300/100, your policy would likely have covered the entire $100,000 injury costs and the full $30,000 vehicle repair costs. Higher limits may cost more, but they could help you maintain financial stability if you cause an accident. In some cases, not having enough coverage could result in the other party filing a lawsuit against you to try and recover the remaining medical costs and other accident-related expenses.

Liability-only coverage might be a good fit for you if:

• You own your car outright: If you have a loan or lease on your vehicle, you will very likely be required to carry full coverage, so liability-only coverage is probably only an option if you own your car in full.
• Budget is your primary concern: Because full coverage provides greater financial protection in the form of coverage for damage to your car, it is more expensive than minimum coverage or liability-only coverage. But keep in mind that paying for less protection means that your budget will take a bigger hit if you have an accident.
• Your vehicle is not worth much: If your vehicle is older and does not have a high market value, it may not make financial sense to pay for full coverage, since the cost of repairing the car might be more than the car is worth. Be sure to evaluate the car’s replacement value to see if the value of the totaled vehicle justifies the higher cost of comprehensive and collision coverage.
• You are not concerned about vehicle damage: If you are not worried about damage to your vehicle and do not think you would repair damages to your vehicle, liability-only might be a good choice.
• You have the finances to repair or replace your car: If you own your car outright and have the finances to repair or replace it if it is damaged, without putting a significant strain on your financial health, liability-only coverage could be a viable option.

Although almost every state has minimum liability insurance requirements, some exceptions exist, namely New Hampshire and Virginia. New Hampshire, for instance, is the only state in the country that does not require car insurance. Virginia, on the other hand, does have minimum insurance requirements, but those who wish to do so can choose to pay a $500 uninsured motorist fee to the DMV once a year in place of an insurance policy.

However, just because you can skip car insurance in these states does not mean it is a wise financial decision. Suppose you are the driver in an at-fault accident and have no insurance. In that case, the other party could sue you for medical expenses and property damage. On top of these expenses, you would also be responsible for paying court costs. These out-of-pocket expenses could add up to thousands of dollars (or more) and may lead to devastating consequences such as bankruptcy.

If you are unsure if liability-only coverage is right for you, working with an agent could be helpful. An agent can assess your situation and help you choose coverage that is appropriate.

Frequently asked questions

Methodology

Bankrate utilizes Quadrant Information Services to analyze 2023 rates for ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a 40-year-old male and female driver with a cleaning driving record, good credit and the following full coverage limits:

• $100,000 bodily injury liability per person
• $300,000 bodily injury liability per accident
• $50,000 property damage liability per accident
• $100,000 uninsured motorist bodily injury per person
• $300,000 uninsured motorist bodily injury per accident
• $500 collision deductible
• $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our sample drivers own a 2021 Toyota Camry, commute five days a week and drive 12,000 miles annually.

These are sample rates and should be used for comparative purposes only. Your quotes may be different.