Liability-only car insurance is a type of auto insurance coverage that only includes coverage for damages and injuries that you cause to another party. This type of coverage is sometimes called PLPD, which stands for personal liability and property damage — the two types of coverage included on liability-only policies. Liability-only insurance can range from state minimum levels to relatively high limits, but never includes coverage for damage to your own vehicle.
Understanding the difference between minimum coverage and liability coverage and knowing what you can expect to pay for this type of insurance could help you make an educated decision about your car insurance policy.
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 personal liability coverage and property damage coverage, which make up liability-only insurance. However, states may also require uninsured motorist coverage, medical payments coverage or personal injury protection (PIP). Even in “no-fault” states, where PIP may be required, you can still purchase a state-minimum coverage policy.
Your policy will not truly be “liability only” if you have added PIP coverage, but you still will not have coverage for your own vehicle. 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, even if your state does not require them.
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 Amica, Erie and Geico. While these average rates are for cheap liability insurance, keep in mind that minimum coverage will vary based on the state where you live.
| Car insurance company | Average annual premium for minimum coverage |
|---|---|
| USAA | $384 |
| Erie Insurance | $409 |
| Geico | $433 |
| Auto-Owners | $382 |
| Amica Mutual | $405 |
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 insurance policies available, due to its low limits, most insurance professionals recommend that you purchase higher liability limits if you can afford to. If you cause an accident where the damages and injuries exceed your coverage limit, you will be responsible for paying the overage out of pocket.
However, when choosing a company, there are other factors to consider in addition to price. You may also want to review a company’s customer satisfaction scores, coverages, 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.
Cost of liability-only car insurance
Because of differing state laws and geographic factors, buying only minimum liability insurance can save you more money in some states than it may in others. For example, the average annual cost of car insurance for minimum coverage in Maine is $294, which saves $671 compared to the cost of full coverage. But the annual cost of minimum coverage in Louisiana is $975, over $1,700 cheaper than full coverage in the state.
While full coverage does cost more than minimum coverage, it provides a greater level of financial protection. Full coverage also includes comprehensive and collision coverages, which cover damage to your vehicle — something that is not included in minimum coverage.
| State | Average annual premium for minimum coverage | Average annual premium for full coverage | Difference |
|---|---|---|---|
| Alabama | $469 | $1,623 | $1,154 |
| Alaska | $373 | $1,559 | $1,186 |
| Arizona | $555 | $1,547 | $992 |
| Arkansas | $470 | $1,914 | $1,444 |
| California | $733 | $2,065 | $1,332 |
| Colorado | $518 | $2,016 | $1,498 |
| Connecticut | $794 | $1,845 | $1,051 |
| Delaware | $787 | $1,775 | $988 |
| Florida | $1,101 | $2,364 | $1,263 |
| Georgia | $756 | $1,982 | $1,226 |
| Hawaii | $345 | $1,127 | $782 |
| Idaho | $307 | $1,045 | $738 |
| Illinois | $442 | $1,485 | $1,043 |
| Indiana | $367 | $1,254 | $887 |
| Iowa | $252 | $1,260 | $1,009 |
| Kansas | $410 | $1,698 | $1,288 |
| Kentucky | $748 | $2,128 | $1,380 |
| Louisiana | $975 | $2,724 | $1,749 |
| Maine | $294 | $965 | $671 |
| Maryland | $767 | $1,877 | $1,110 |
| Massachusetts | $510 | $1,223 | $713 |
| Michigan | $948 | $2,309 | $1,361 |
| Minnesota | $537 | $1,643 | $1,106 |
| Mississippi | $492 | $1,782 | $1,290 |
| Missouri | $468 | $1,661 | $1,193 |
| Montana | $342 | $1,737 | $1,395 |
| Nebraska | $335 | $1,531 | $1,196 |
| Nevada | $860 | $2,245 | $1,385 |
| New Hampshire | $389 | $1,275 | $886 |
| New Jersey | $847 | $1,757 | $910 |
| New Mexico | $385 | $1,419 | $1,034 |
| New York | $1,062 | $2,321 | $1,259 |
| North Carolina | $413 | $1,325 | $912 |
| North Dakota | $285 | $1,264 | $979 |
| Ohio | $328 | $1,034 | $706 |
| Oklahoma | $423 | $1,873 | $1,450 |
| Oregon | $610 | $1,346 | $736 |
| Pennsylvania | $427 | $1,476 | $1,049 |
| Rhode Island | $749 | $2,018 | $1,269 |
| South Carolina | $558 | $1,512 | $954 |
| South Dakota | $275 | $1,642 | $1,367 |
| Tennessee | $371 | $1,338 | $967 |
| Texas | $524 | $1,823 | $1,299 |
| Utah | $528 | $1,306 | $778 |
| Vermont | $292 | $1,207 | $915 |
| Virginia | $441 | $1,304 | $863 |
| Washington | $463 | $1,176 | $713 |
| Washington DC | $704 | $1,855 | $1,151 |
| West Virginia | $458 | $1,499 | $1,041 |
| Wisconsin | $332 | $1,186 | $854 |
| Wyoming | $271 | $1,495 | $1,224 |
Reasons to consider purchasing liability-only car insurance coverage
To drive legally in your state, you will need to purchase at least the minimum liability car insurance. However, you can purchase higher liability limits and still have liability-only car insurance. 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.
- Budget is your primary concern: Because full coverage provides greater financial protection in the form of coverage for damage to your car, it is generally more expensive than minimum coverage or liability-only coverage.
- Your vehicle is not worth much: If your vehicle is older and does not have a high value, it may not make financial sense to pay for full 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, 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.
If you are unsure if liability-only coverage is right for you, working with an agent could be helpful. An agent can listen to your situation and help you choose coverages that are appropriate.
Frequently asked questions
What company offers the cheapest liability-only car insurance?
There is no one company that has the best cheap liability insurance for all drivers. Each insurance provider uses different metrics for assigning premiums and looks at different factors, including the age and model of your car, your age, marital status and driving record. It may be helpful to get quotes from several companies to see who is cheapest for your own circumstances.
Is it enough to carry the minimum liability that my state requires?
To drive legally in any given state, you only need to purchase the minimum required coverages. However, many experts suggest that you purchase higher liability limits. Even a moderate accident can cause thousands of dollars in property damage and even more in medical costs. If a lawsuit results from the accident, you may find yourself facing significant financial difficulties. Talking to a licensed agent about your financial situation may help you to determine how much coverage to purchase. And remember that if your vehicle is financed, your lender will likely require you to have full coverage.
Why are minimum costs so different in each state?
Every state sets its own minimum coverages. Some of the factors that may go into that determination include how often accidents occur within the state, how many licensed drivers or registered vehicles are on the state’s roads and the average price of a car accident in that state. Because each state has different minimum coverages, the price for the coverage varies.
Methodology
Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. 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 coverages that meet each state’s requirements. Our sample drivers own a 2019 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.
Share