Liability-only auto insurance covers only damages or injuries you cause to others. This coverage is also known as PLPD (personal liability and property damage) because it excludes coverage for injuries or damages that you cause to another person. Liability-only insurance can range from state minimum levels to relatively high limits, but never includes coverage for damage to your own vehicle.
Knowing the difference between liability and minimum coverage, and what you can expect for this type insurance to cost could help you make an informed decision about your car insurance policy.
What is the minimum coverage?
The minimum coverage is the coverage that covers only the minimum amount required by your state for car insurance. 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). You can still buy a minimum coverage policy even in states with no fault.
Although your policy is not “liability-only”, you will still not be covered for your vehicle if you have purchased PIP coverage. If you are the owner of your vehicle, liability-only coverage is not an option. Your lender may require you to have full coverage if you have a loan, lease, or other financial obligation. Noting that “liability only coverage” is not an industry standard term, it is worth noting. Even if you do not require them, some companies might consider PIP or medical payments to be part of a liability only policy.
Lowest car insurance for liability
Our research shows that Auto-Owners, USAA and Amica are the most affordable companies for minimum coverage. Geico, Erie, and Erie follow closely. While these average rates are for cheap liability insurance, keep in mind that minimum coverage will vary based on the state where you live.
Finding cheap car insurance is a priority for many drivers. Comparing quotes from different carriers is a good idea as it allows you compare prices for the same coverage. Although minimum coverage can be the most affordable type of liability insurance policy, because it has low limits, most insurance professionals recommend you buy higher limits if you have the funds. You will be responsible for any excess damages or injuries you cause to another person.
There are many other factors that you should consider when selecting a company. It is also worth looking at the company’s customer satisfaction scores and coverages. Every person has different insurance needs, so it is worth getting quotes from multiple carriers to help you choose the best policy.
Car insurance with liability only
Due to the differences in state laws and geographical factors, purchasing minimum liability insurance may save you more in certain states than 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. However, Louisiana’s minimum coverage costs $975 annually, which is more than $1,700 less than full coverage.
While full coverage does cost more than minimum coverage, it provides a greater level of financial protection. Full coverage includes collision and comprehensive coverages that cover vehicle damage. This coverage is not available with minimum coverage.
There are many reasons to purchase liability-only auto insurance coverage
You must have minimum liability insurance to drive legally in your state. You can buy higher liability limits while still having liability-only insurance. If you are:
- Your car is yours. If your vehicle is financed or leased, you will likely need to have full coverage.
- Your budget is the most important concern. Full coverage offers greater financial protection in form of coverage for damage or loss to your vehicle. It is usually more expensive than minimal coverage or liability-only.
- Your vehicle may not be worth much: It might not be financially prudent to purchase full coverage if your vehicle has a low value or is very old.
- You don’t care about vehicle damage. If you aren’t concerned about vehicle damage and you don’t think you can repair it, liability-only might be the best option.
- You have the funds to fix or replace your car. If you own your car and are able to pay for repairs or replacements without putting too much strain on your finances, liability-only coverage may be an option.
An agent can help you determine if liability-only coverage is right. An agent will listen to you and help you select the right coverages.
Questions frequently asked
Which company provides the lowest liability-only auto insurance?
There is no single company that offers the lowest cost 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. To find the best price for you, it may be beneficial to compare quotes from different companies.
Does it suffice to have the minimum amount of liability required by my state?
You only need the minimum coverage to drive legally in each state. Experts recommend that you buy higher liability limits. Even a minor accident can result in thousands of dollars in property damages and more expensive medical bills. You could face serious financial problems if you are sued for the accident. A licensed agent can help you determine the right amount of coverage. Remember that your lender may require you to have complete coverage if your vehicle has been financed.
What is the reason that minimum cost in every state is so different?
Each state has its own minimum coverage. There are many factors that could influence that decision, including how frequently accidents happen in the state, how many registered drivers and vehicles are driving on state roads, as well as the average cost of a car accident in the state. Each state has a different minimum coverage, so the cost of coverage can vary.