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Liability-only car insurance
Cheaper coverage that’s stripped down to your state’s bare minimums.
The purpose of a liability-only policy is to cover the bare necessities on your vehicle. This could benefit some drivers who own a beater, don’t drive much or live on a limited income. When looking into this minimal policy, consider the coverage you need to stay financially stable even if an accident occurs.
What does liability-only car insurance cover?
Liability-only coverage strips your policy of all the extras and keeps in just enough to meet your state’s requirements. For some states, that means just property and bodily-injury liability, while others involve a few more coverage types, including:
- Bodily-injury liability. Makes sure other drivers and passengers get the necessary medical attention after your accident.
- Property-damage liability. Takes care of the other driver’s car repairs―and any other damage to fences or buildings ― if you cause the accident.
- Uninsured/underinsured motorist. Safeguards from paying your own car or medical expenses if the at-fault driver can’t pay up. Required in many states.
- Personal injury protection (PIP). Covers you or your passengers for medical bills and other benefits like income loss, whether or not the accident is your fault. Required in some states
What’s not covered by liability-only car insurance?
Your liability-only policy limits protection to what’s required, unless you add optional coverage. Depending on your situation, you could be skimping on helpful protection, like:
- Collision damage to your car. Comes in handy when your car gets damaged in an accident you cause.
- Noncollision damage. Pays for damage not involving another car collision, including theft, vandalism or an accident involving an animal.
- Replacement cost. Helps you recover the full value of your vehicle, without taking depreciation into account.
- Rental car. Gives you a fully-paid ride while your car gets worked on post-accident.
- Roadside assistance. Lends you a hand when you break down roadside with minor needs, like fuel delivery, battery jumpstart or tire replacement.
Compare liability car insurance policies
Liability-only coverage in action.
After work one day, James T-boned another driver with his car, carrying only the state minimum insurance coverage. His 5-year-old sedan was damaged, as was the other driver’s brand new luxury car, along with related injuries. Stacey, a friend who was riding with James, also needed to pay for medical bills.
James’s policy covered the other driver’s injuries, but it left about $5,000 worth of car repairs. He was also left paying for his own car’s repairs and Stacey’s medical bills out of pocket, amounting to $2,000. Adding collision and PIP coverage would have cost James $340 in increased premium costs that year.
How much does liability car insurance cost?
You could expect this bare insurance policy to cost around $1,000 per year, or even less if you don’t need uninsured/underinsured or PIP coverage. However, remember that this reduced coverage means you’ll shoulder more expenses if an accident does happen.
You’ll also pay more for higher liability maximums, but it’s typically minimal to add a little more coverage to the state minimum requirements. For example, upping your liability coverage from state-required 20/40 bodily injury damage liability to 100/300 could cost as little as $50 to $100 annually. That’s a difference of $8 per month to increase your coverage five times over.
Who has the cheapest liability car insurance?
Geico tends to have the cheap liability policies, but the military-affiliated USAA tails close behind. However, regional insurers, such as Grange and Mercury, may have the lowest rates in your area, compared to bigger companies that account for nationwide accident risk.
The best way to find the cheapest insurance is to compare quotes from multiple companies.
When should I consider liability-only car insurance?
When opting for a bare-bones liability policy, consider whether it would fit your driving needs or leave you financially stripped after an accident. Situations that might warrant less coverage:
- Extra coverage costs more than your car. You might not want to pay extra every year for a car you could easily replace out of pocket.
- You have a limited income. Lowering coverage could help you scale back your budget for savings or other necessities.
- You don’t drive much. Your risk decreases if you’re a homebody, live in a rural area or prefer to bike or walk.
- You garaged your car. You tucked your car away but are looking to keep some insurance to avoid a coverage lapse.
- You have good health insurance. You can often skip PIP coverage if it’s not required in your state and you have good health insurance. Even better if you don’t often drive with passengers.
Liability insurance vs. full coverage
Liability insurance pares down coverage to the state’s minimum requirements, which could keep your cost well under $1,000 per year depending on the insurer.
On the other hand, full coverage gives you protection for a variety of accidents, but you can expect to pay an average $1,300 per year. Full coverage typically includes liability plus collision and comprehensive.
|Coverage||Liability only||Full coverage|
|Bodily injury liability||Yes||Yes|
|Property damage liability||Yes||Yes|
|Uninsured/underinsured motorist||If required by state||Yes|
|Personal injury protection (PIP) or medpay||If required by state||Optional|
|Loan or lease GAP||No||Optional|
|New car replacement||No||Optional|
|Rental car reimbursement||No||Optional|
A liability-only policy does mean much less coverage, but that could benefit drivers in certain situations. Whether you choose liability-only or full coverage, look at multiple companies to help you find the best rates.
Frequently asked questions about liability insurance
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