To find the cheapest liability insurance, it helps to understand your terms. “Liability” means you are responsible for something by law, and in the case of auto insurance, it refers to your need to pay for any medical, legal or damage costs incurred following an accident.
That, in a nutshell, is why you have auto insurance: by paying your premiums, you are ensuring that the company will cover your costs if you are in an accident, thus fulfilling your state’s liability requirements.
Most U.S. states require drivers to carry a minimum amount of liability insurance divided into bodily injury liability and property damage liability. Although there may be other mandatory or optional coverage options for you, at its most basic, your car insurance covers liability.
Cheapest liability car insurance
|Car Insurance Company||Average Annual Premium for Minimum Coverage|
Cheap liability car insurance coverage is available from a number of insurers. Based on our research, some of the best are USAA, Erie, Geico, Auto Owners and Amica. USAA, which sells policies only to military members, veterans, and their families, was the cheapest option, with liability insurance costing an average of $351.
Our other picks were not far behind, though, and it is worth noting that all these companies also score well for financial stability and customer service. Because each individual’s insurance needs are unique, any of these companies might be able to offer you the best price.
When you are looking for cheap liability insurance, you will also need to know if there are other requirements in your home state. Twelve U.S. states fit into the “no fault” category, which means they require personal injury protection (PIP) or medical payment coverage. Some states, like New York, also mandate uninsured/underinsured motorist coverage. In order to drive legally, you will need to have all the types of coverage that your state requires.
Cost of liability-only car insurance
The cost of liability-only car insurance varies from state to state, as you can see from the chart below. The average annual premium for minimum liability coverage ranges from a low of $227 in Maine to a high of $995 in Michigan.
There is also a significant difference between minimum coverage and full coverage insurance in each state. In Maine, for example, full coverage costs an additional $555; in Michigan, it is $1,379 more than liability coverage.
Full coverage insurance includes all the state minimum coverages plus collision and comprehensive insurance, which pays for damages to your own car in the event of an accident (collision) or other mishap, such as theft or storm damage (comprehensive).
Because of the additional coverage options that you get with full coverage insurance, it is more costly than liability-only insurance, but it provides additional financial protection that you would not have if you have only the minimum insurance required in your state.
|State||Average Annual Premium for Minimum Coverage||Average Annual Premium for Full Coverage||Difference|
Reasons to purchase liability car insurance coverage
To drive legally in your state, you will need to purchase at least the minimum liability car insurance. In some cases that may be enough. If you are tight on money and trying to save every penny, then cheap liability car insurance, with no extras, may make sense for you.
You may also want to pass on full coverage if your car is older and not worth as much. Why pay extra for collision and comprehensive if your 2004 Honda Civic is not worth much more than your deductible? If you are in an accident, you would probably decide to junk the car and purchase a newer model rather than fix the old one.
If you are driving a newer model car, however, and you can afford to add collision and comprehensive, it is a good idea to do so. If you are in an accident that totals your car, for example, your collision coverage will pay for the car’s depreciated value, minus your deductible. You may also want to purchase optional gap insurance if you have a car loan, since it covers the overage between what your car’s value is and what you owe.
Frequently asked questions
What company offers the cheapest liability-only car insurance?
There is no one company that always has the best cheap liability insurance. Each insurance provider uses different metrics for assigning premiums, and it looks at factors including the age and model of your car, your own age, marital status, and driving skills, and more. Your best bet is to get quotes from several companies to see who is cheapest for your own circumstances. A good place to start your search is with our Best Car Insurance Companies of 2021 listing.
Is it enough to carry the minimum liability that my state requires?
Many experts suggest that if you can afford it, you should purchase more than the minimum. A serious accident can cause thousands of dollars in damage, and even more in medical costs. If a lawsuit results from the accident, you may find yourself facing significant financial difficulties. Our recommendation is to purchase as much liability insurance as you are able to handle financially.
Why are minimum costs so different in each state?
Just like you as a driver are unique, so is each state. Factors such as severe weather that is common to the state and the ratio of urban to rural drivers all play a role in determining the average costs for drivers in that state.
Bankrate utilizes Quadrant Information Services to analyze 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 2018 Honda Accord, 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.
Why Trust Us
Bankrate demystifies the insurance industry by making it easier to find insurance information. Regardless of where you are in your journey, Bankrate helps you make informed decisions.
We use two key sets of customer priorities to evaluate insurance carriers and help you decide what to consider:
First: we evaluated customer satisfaction and complaints, financial strength and stability and overall costs based on average rates quoted to real drivers.
Second: we evaluated customer experience by assessing each provider’s customer service options through online capabilities and agent accessibility.