Cheapest Liability-Only Car Insurance (2023)

Cheapest Liability-Only Car Insurance (2023)

Auto-Owners offers cheap liability-only insurance at $36 per month, though USAA has even lower rates for drivers who qualify.

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The average cost of minimum liability car insurance is $55 per month.

Liability-only car insurance only provides the minimum coverage required by your state, which is why it's the cheapest kind of car insurance. It's a good option for drivers who have an older car or who can afford to repair or replace their car.

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Which company has the cheapest liability-only car insurance?

State Farm has the cheapest liability-only car insurance among the largest auto insurance companies, with a monthly quote of just $41. That's 33% cheaper than the average rate of $55.

Auto-Owners and Erie are cheaper regional companies with liability rates less than $40 per month.

The graph shows the rates for liability-only coverage from some of the larger insurers in the US

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USAA is the cheapest company for liability-only coverage by far for current or former military members who qualify, with rates averaging only $31 per month.

Local car insurance companies are often cheaper than national brands, and some major names such as Travelers and Allstate can be quite expensive on average. The cheapest liability insurance for you may change based on factors like your accident history, credit score and location.

Cheapest liability only car insurance rates

Major companies
Monthly rate
Auto-Owners$36
Erie$39
State Farm$41
Farm Bureau$43
Geico$52
American Family$53
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USAA is only available for current and former military members and their families.

ValuePenguin collected thousands of quotes from every ZIP code in every state to find the cheapest companies for minimum coverage car insurance. Minimum liability policies include only the required coverage for that state.

Full methodology

How to find the cheapest liability-only car insurance

When comparing the cheapest companies for liability-only car insurance, the best way to get affordable rates is to get quotes from multiple insurance companies for the exact coverage you need.

The cheapest companies for liability-only coverage don't always have the cheapest full coverage policies.

In other words, just because an insurance company has the best quotes for a full coverage car insurance policy doesn't mean that it will also offer you the lowest rate for a liability-only policy.

How much cheaper is liability-only coverage?

Liability car insurance costs an average of 62% less than full coverage. Liability-only car insurance is significantly cheaper than full coverage insurance because it doesn't include collision and comprehensive coverage.

How Liability-Only Insurance Cost vs. Full Coverage

Find Cheap Liability-Only Car Insurance in Your Area

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Monthly cost of liability-only vs full coverage car insurance

Company
Liability rate
Full rate
Savings
Auto-Owners$36$120$84
Erie$39$101$62
State Farm$41$99$58
Farm Bureau$43$134$91
Geico$52$140$88
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Why is liability only car insurance so much cheaper?

Full coverage insurance generally includes:

  • Liability protection above the minimum requirement
  • Collision and comprehensive coverage
  • Any other coverages required by law, such as personal injury protection (PIP)

Dropping collision and comprehensive coverage saves money on your car insurance bill but puts you at greater financial risk because you might have to pay to fix your own car after a crash. If you opt for liability-only coverage, insurance would not pay for damage to your vehicle if:

  • You are at fault in an accident.
  • You are the victim of a hit-and-run (if you aren't required to have uninsured motorist coverage).
  • Your car is damaged by weather, hail or animals.
  • Your car is keyed or vandalized.

How much is liability-only car insurance by state?

The cost of auto insurance varies based on where you live. This is partly due to differences in risk and different insurance laws in each state.

South Dakota has the cheapest rate for minimum coverage in the country, at $28 per month on average. Michigan's average rate of $196 per month is the most expensive.

Liability only car insurance quotes in your state

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When should I get liability-only car insurance?

Liability-only coverage is typically a good idea for cars 8 and 12 years old or older, and worth $5,000 and $10,000 or less.

Full coverage car insurance is a better deal when your car is new. When your car is new, it's worth more, so insurance companies will spend more money to repair it before declaring it to be totaled. As your car gets older, you'll pay more in premiums for collision and comprehensive coverage than you could get paid out after a claim.

  • The most money you'll get from a car insurance claim is its actual cash value, or ACV — how much the same vehicle would cost to buy today, accounting for its age.
  • If your car is a total loss, that means the cost to repair your car is more than its actual cash value, and your insurance company will write you a check for the car's value.

If a new car's actual cash value is $20,000, your insurance company will pay you a maximum of $20,000 to get it fixed. However, as your car ages, it loses value, so the maximum payout of a collision claim goes down.

If your car's ACV is $5,000, that's the maximum amount your insurer will pay if your car is damaged or stolen.

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While a car's value drops by about 13% for each year you own it, the cost of full coverage only decreases by about 5%.

This makes comprehensive and collision coverage effectively a worse deal for an old car than for a new one. At a certain point, it's not worth having comprehensive or collision coverage at all.

When to drop comprehensive and collision coverage

You should drop full coverage when you can reasonably afford to replace your vehicle if you have to. Paying for full coverage becomes a worse deal the longer you have your vehicle.

For example, the cost to buy a new Honda Civic is about $22,000, and the cost of comprehensive and collision on that car is $2,207 per year — about one-tenth of its value.

On the other hand, a 10-year-old Civic is worth about $7,000, but comprehensive and collision cost $1,200 — meaning you pay one-sixth of your car's value to keep comprehensive and collision for a year.

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When to consider liability-only coverage

  • You have enough savings to replace your car if it's destroyed or stolen.
  • Your car is older or not valuable.
  • You don't have a daily commute.
  • You don't often drive at night.
  • You are older than 25.
  • You park your car indoors at night.
  • You don't have a car loan or lease.

What is liability-only car insurance?

Liability-only car insurance pays for expenses related to medical care and car damage to others in an accident you cause. It's also the minimum amount of car insurance you can buy to legally drive your car.

Liability-only car insurance includes bodily injury and property damage liability coverage in most states.

  • Bodily injury liability: Pays for injuries and medical bills suffered by drivers and passengers in another vehicle if you are found to have caused an accident.
  • Property damage liability: Pays for damage to other vehicles and property caused by an accident determined to be your fault.

You can also opt for a high amount of liability insurance coverage without comprehensive and collision coverage. It doesn't cost much more to raise your liability limits significantly.

In 22 states, you only need to buy liability coverage to have the minimum coverage. In 28 other states and Washington, D.C., drivers are also required to buy one of the following — or both — in order to meet their minimum insurance requirements:

  • Personal injury protection/ Medical payments: Covers your own medical bills (and those of your passengers) after a car crash, regardless of who is at fault.
  • Uninsured motorist coverage: If the other driver in a crash is at fault but does not have liability coverage, uninsured motorist coverage pays for your medical and car repair bills.

What's not included with liability-only car insurance?

Liability-only coverage doesn't include collision and comprehensive coverage. Besides liability, these two coverages generally make up the largest portion of a full coverage car insurance bill.

  • Collision coverage pays for damage to your car if you are at fault or no one is at fault.
  • Comprehensive coverage pays for damage caused by elements out of your control such as weather, animals or vandalism.

Some car insurance companies won't let you add other types of coverage, like roadside assistance, without full coverage.

Frequently asked questions

What is liability car insurance?

Liability car insurance is coverage that pays for damage to others when you're at fault in an accident. It includes coverage for bodily injuries as well as property damage. Liability coverage is required in nearly every state.

Should I get liability-only car insurance?

Liability-only car insurance only includes liability protection and no other optional coverages like comprehensive or collision. People with older, less expensive cars should consider getting liability-only car insurance instead of full coverage. Full coverage is a worse deal for older cars because your highest possible payout falls faster than the cost of adding coverage.

What is supplemental liability insurance for car rentals?

All cars on the road are required to have the legal minimum amount of liability car insurance, including rental cars — you'll get the legal minimum coverage automatically as part of your rental. You have the option to purchase supplemental liability coverage, which boosts your coverage beyond the legal minimum.

Who has the cheapest liability-only car insurance?

The cheapest widely available liability-only car insurance we found comes from Auto-Owners at $36 per month. USAA is cheaper but is not available to all drivers, and Erie, State Farm and Farm Bureau are all affordable options.

How do I read liability limits?

Liability limits are often written as three numbers, such as 25/50/25. The first is the number of thousands of dollars of liability coverage per person injured in an accident. The second is the limit, in thousands of dollars, for bodily injury coverage per accident, and the third is the limit for property damage you cause in an accident.

What if my car is totaled and I only have liability insurance?

If your car is stolen or totaled, which means the cost to repair it is more than its value, you'll have to pay to replace your car yourself, unless another driver was at fault. Liability insurance only pays for damage to other people's cars, not your own.

Methodology

We calculated rates for the cheapest liability insurance for all the insurance companies that offer policies in at least five states and for which data was available. Rates are for a 30-year-old driver with good credit and a clean driving history who drives a 2015 Honda Civic EX.

To calculate full coverage vs liability-only insurance rates, ValuePenguin collected quotes from 37 insurance companies across the US.

Full coverage rates include coverage limits above state minimum levels, along with uninsured/underinsured motorist bodily injury, comprehensive and collision coverage. Rates for liability-only policies represent the average cost of a policy that meets a state's minimum required auto insurance coverage.

ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes may be different.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.