If you’re seeking minimum coverage for your car, GEICO offers the most affordable liability-only insurance for most drivers at an average monthly cost of $27 or a yearly cost of $327.
That being said, the cost may differ depending on factors such as your location, driving history,, and vehicle type.
This article will provide an overview of liability-only coverage, tips for finding the cheapest rates, factors affecting cost, and the pros and cons of choosing this pared-down policy.
What is Liability-Only Car Insurance?
Liability-only car insurance, sometimes referred to as a minimum limits policy, only includes bodily injury liability and property damage liability coverage.
Bodily injury liability helps pay for injuries to others if you are at fault in an accident. This includes medical treatment, rehabilitation, lost wages, and pain and suffering damages.
Property damage liability helps pay for repairs to another person’s vehicle or property that you damage in a covered accident.
Liability-only policies do not include collision, comprehensive, uninsured motorist, or personal injury protection coverages. These cover damage to your own vehicle and medical expenses for you and your passengers.
The key difference between liability-only and full coverage is that liability-only protects other people, while full coverage also protects you and your vehicle. Minimum liability limits vary by state but generally range from $10,000 to $25,000 per person for bodily injury, up to $50,000 per accident, and $10,000 for property damage.
The most affordable liability-only insurance policies are offered by Geico, Progressive, and State Farm.
How to Find the Cheapest Liability-Only Car Insurance?
The best way to get the lowest liability car insurance rates is to comparison shop. Rates can vary significantly between insurers based on their risk assessment models and pricing strategies. Here are some tips for finding cheap liability coverage:
- Get quotes from at least 5-6 insurers, including national carriers and local companies. Compare them side-by-side.
- Use online quote tools on insurer websites and independent sites like Insurance.com or TheZebra.com. This simplifies rate comparisons.
- Ask about discounts for things like taking a defensive driving course, maintaining good credit, insuring multiple cars on one policy, and more. These can help lower premiums.
- Consider raising deductibles or dropping comprehensive/collision if required to qualify for discounts.
- Ask about group insurance and alumni discounts if available through employers, associations, or schools.
- Bundle home and auto policies with the same insurer if possible.
Taking advantage of variables like these when shopping for quotes can potentially save hundreds on inexpensive liability car insurance.
Factors Affecting the Cost of Liability-Only Car Insurance
Liability insurance rates are based on risk exposure and several personal and vehicle factors that play a role include:
- State minimum required coverage limits – Higher limits cost more.
- Driver’s age – Young drivers under 25 will have much higher premiums.
- Driving and accident history – Clean records get the best rates.
- Credit-based insurance scores – Better scores mean lower rates.
- Vehicle makes, model, and year – Insuring sports cars or luxury vehicles costs more.
- The primary use of the vehicle – Commuting or business use may increase risk/rates.
- Location/zip code – Urban areas with more accidents and theft cost more.
- Insurance company’s risk analysis metrics – Each insurer assesses risk differently.
While you can’t change some factors, being a safe driver, maintaining good credit, and driving an older vehicle can help minimize liability premiums.
Pros and Cons of Choosing Liability-Only Insurance
Advantages of minimum limits liability coverage:
- Extremely cheap car insurance option.
- Meets state minimum requirements for financial responsibility.
- Covers damage and injuries to other parties in accidents you cause.
- May qualify for more discounts than full coverage policies.
Disadvantages of liability-only car insurance:
- No coverage for your vehicle if it’s damaged or totaled.
- No coverage for injuries to you or your passengers.
- No protection from uninsured drivers.
- Higher out-of-pocket costs if you cause an accident.
Liability-only insurance makes the most financial sense for drivers with older vehicles of low value. For newer cars, full coverage protects your asset. Ultimately it comes down to weighing premium savings vs risk tolerance. Understanding your state laws, risks, and finances can help inform the right minimal liability limits or full coverage decision.
Do you need more than Liability Insurance?
Here are some key factors to consider when deciding if you need more than just liability car insurance:
- Age and value of your vehicle – If you drive an older, low-value car that you could afford to replace, liability may be enough. For newer cars, collision, and comprehensive coverage is wise to protect your asset.
- Your financial situation – Can you afford major out-of-pocket repair bills or replace your vehicle if it’s totaled? If not, more coverage is advisable.
- Your risk tolerance – Liability only means you’re on the hook for damage to your own vehicle. Are you comfortable with that level of risk exposure?
- Loan/lease requirements – If you have an auto loan or lease, full coverage will likely be required in the contract terms.
- Where you live – In areas with high theft or accident rates, additional coverages provide more protection.
- Your driving habits – More coverage provides a cushion if you have young drivers, long commutes, or an accident history on your policy.
- Uninsured motorist coverage – This protects you if you’re hit by a driver with no insurance. It’s often wise to add this.
- Medical costs – In a serious accident, medical bills can easily exceed $10,000. Personal injury protection helps cover your expenses.
While liability insurance meets state minimums, evaluating these factors can help you determine if you should purchase additional coverages for greater financial protection.
How Much Is Liability Car Insurance Coverage?
According to NerdWallet, the average annual cost of liability car insurance in the USA was $611 in 2020. However, this can vary widely depending on your personal situation. For example, a 25-year-old driver with a clean record in California might pay around $1,000 per year for liability coverage, while a 40-year-old driver with a DUI in Florida might pay over $3,000 per year.