Cheap liability-only car insurance

The cheapest liability-only car insurance

As of July 2024, Auto-Owners, USAA, and Geico are the three cheapest car insurance companies for liability-only coverage, based on the latest rates available from Quadrant Information Services. Bankrate’s insurance editorial team analyzed average rates and Bankrate Scores for the best companies for cheap liability insurance, as summarized in the table below. 

Keep in mind that rates vary based on individual driver factors as well as state laws, which mandate different minimum coverage levels for liability-only policies.  

The cheapest liability-only car insurance for poor credit

Poor credit can cause the cost of liability-only auto insurance to climb significantly. On average, drivers with poor credit pay $1,202 nationally for state minimum liability coverage. However, some companies put less emphasis on credit history when underwriting liability coverage. If you’re looking for a liability-only policy and have poor credit history, take the time to compare rates from multiple companies to ensure you’re getting the best deal on the coverage you need. 

The cheapest liability-only car insurance after an at-fault accident

If you’ve been found at fault in a car accident, the cost of your auto insurance will increase at your next policy renewal. Drivers with an at-fault accident on their record typically pay 54 percent more for minimum liability coverage, on average, than drivers with clean record. This is another situation where shopping around and comparing quotes can help you to find the best rates. 

Factors that affect liability-only insurance costs

A liability-only auto insurance policy typically costs less than full coverage insurance, since it contains fewer types of coverage. However, a range of rating factors impact the potential cost of liability coverage for each individual driver, including: 

• Driving history: Drivers with violations or at-fault accidents on their driving record typically pay more for liability-only insurance. 

• Age or driving experience: Young drivers, especially those under age 25, pay higher rates for liability insurance due to the increased risk of accidents that comes with inexperience on the road. 

• Credit: Insurance companies analyze customers’ credit history with something called a credit-based insurance score. A lower score correlates to a potentially higher risk of future claims, so insurers tend to charge higher rates for drivers with poor credit. 

• Vehicle: The risks associated with your vehicle’s make and model can impact the cost of liability-only insurance, with lower rates typically assigned to cars with strong safety ratings.  

State minimum coverage limits

Not all states permit drivers to purchase only liability insurance. In 26 states and Washington, D.C., drivers must also purchase some combination of uninsured/underinsured motorist coverage, personal injury protection (PIP) and/or medical payments (MedPay) coverage. Check the minimum coverage requirements in your state to understand your financial obligations when purchasing auto insurance.  

What is PLPD insurance? 

PLPD insurance, or personal liability and property damage insurance, is a term sometimes used to refer to auto liability insurance. PLPD insurance includes two types of coverage: bodily injury (BI) liability insurance, which pays for injuries or deaths you may cause while driving; and property damage (PD) liability insurance, which pays for damage to other parties’ property that you’re found responsible for. 

PLPD insurance is typically written as split limits, with separate coverage limits for bodily injury per person, bodily injury per accident and property damage per accident. In a state with 25/50/25 PLPD limits, drivers must purchase $25,000 of BI liability per person, $50,000 of BI liability per accident and $25,000 of property damage liability per accident. 

What is BI insurance?

BI, or bodily injury, refers to the part of a PLPD insurance policy that covers bodily injury to others. When you purchase BI insurance, your insurance company agrees to cover the cost of injuries you cause to others up to your policy’s set limits. BI insurance protects your assets and future earnings from potential lawsuits in the event of an at-fault accident. 

Car insurance discounts for liability-only car insurance

Most auto insurers offer a range of car insurance discounts to reduce the cost of coverage for responsible drivers. While some discounts, such as vehicle equipment discounts, only apply to certain portions of a policy such as medical coverage or comprehensive coverage, some discounts can be used to lower the cost of liability-only auto insurance. 

Telematics discounts

Usage-based telematics apps, which track driver behavior using GPS signals in exchange for potential safe driving discounts, are becoming increasingly popular among car insurance companies. Program requirements and average discounts vary from company to company, but you can often get a small discount just for participating in the program, and some carriers will lower your premium by as much as 30 percent or more if you avoid unsafe driving habits like speeding and hard braking. If you’re confident in your safe driving skills, finding a provider with a strong usage-based insurance discount could help to reduce the cost of liability coverage. 

Student discounts

Many car insurance companies offer auto insurance discounts for students, which can help to offset the cost of a liability-only policy when you’re still in a high-risk pricing category. Getting good grades, taking driver education courses or even belonging to a sorority, fraternity or alumni association could earn you discounts from certain insurers. 

Payment method discounts

Simply opting for automated electronic payments or paperless billing can earn you a discounted rate on liability insurance with some carriers. In some cases, you may also be able to get a lower rate by paying your entire annual premium in full rather than in monthly installments. Ask your current insurer about available discounts or consult with an insurance agent or broker to learn more about your eligibility for this type of discount. 

How much does liability-only car insurance cost?

On average, state minimum insurance costs drivers an average of $621 per year. However, PLPD insurance costs vary by state. For instance, the average cost of car insurance in Wyoming is $259 per year for 25/50/20 liability-only coverage. In Louisiana, limits of 15/30/25 cost drivers an average of $940 per year. Use the table below to compare the latest rates for full and minimum coverage in every state. 

How much cheaper is liability vs. full coverage? 

Bankrate’s research shows that on average, state minimum PLPD insurance costs around 73 percent less per month than full coverage insurance for drivers with clean records. But liability-only coverage isn’t one-size-fits-all, and costs can vary significantly. 

• Where you live matters: Each state’s minimum coverage limits and risk factors impact the cost of liability-only coverage — and in some states, insurance laws don’t allow drivers to purchase only liability coverage. 

• High liability limits bump up the cost: High limits on a liability-only policy can increase financial protection while increasing the cost of coverage by a few dollars per month. 

• Companies price liability differently: The insurer you choose determines the ultimate cost of your liability-only coverage, and some car insurance companies charge less than others for a liability policy. 
• High-risk drivers pay more: If you’re under age 25 or have violations or accidents on your driving record, you can expect to see higher rates for both liability-only and full coverage policies. 

Across the board, liability-only coverage is significantly cheaper than full coverage, but the gap might be smaller or wider depending on your insurer, the rating factors in your individual driver profile and the coverage limits you select. 

Average annual cost of minimum coverage insurance vs. full coverage

Is liability-only auto insurance right for me?

Carrying a liability-only car insurance policy exposes you to more financial risk than a full coverage policy would. With full coverage car insurance, your policy includes comprehensive coverage and collision coverage. This means you are protected from the damage done to your vehicle in a wider variety of circumstances. 

With a liability-only policy, your insurance provider can only help cover the damage you cause, like if you run a red light and T-bone another vehicle. Any damage or loss to your own vehicle — from an accident, hitting a deer, vandalism or auto theft — would be up to you to cover out of your own finances. 

Cheap PLPD car insurance might be a good option for you if:

• You own your car outright: If you have a loan or lease on your vehicle, most lenders will require you to carry full coverage, making liability-only coverage impossible until you’ve paid off your loan or lease. 
• Budget is your primary concern: While liability-only coverage is cheaper upfront, it also carries significantly larger financial risks. A single accident with liability-only insurance could leave you with thousands of dollars of out-of-pocket costs. 
• Your vehicle is not worth much: If your vehicle is older and does not have a high market value, it may not make financial sense to pay for full coverage, since the cost of repairing the car might be more than the car is worth. Compare your car’s actual cash value with the cost of comprehensive and collision coverage to decide if investing in full coverage is worth it for your budget. 
• You have the finances to repair or replace your car: If you own your car outright and can afford to repair or replace it if it is damaged without putting a significant strain on your financial health, liability-only coverage could be a viable option.

Liability-only car insurance is risky for most drivers, but it could be a good fit if you have strong finances and a car that isn’t worth much. If you’re not sure whether liability-only coverage is a good idea for your situation, talking to an independent broker or licensed agent could help you evaluate your insurance needs. 

Frequently asked questions

Methodology

Bankrate utilizes Quadrant Information Services to analyze July 2024 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a single, 40-year-old male and female driver with a clean 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 coverage that meets each state’s requirements. Our base profile drivers own a 2022 Toyota Camry, commute five days a week and drive 12,000 miles annually. 

These are sample rates and should only be used for comparative purposes. 

Credit-based insurance scores: Rates were calculated based on the following insurance credit tiers assigned to our drivers: “poor, average, good (base) and excellent.” Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. Four states prohibit or limit the use of credit as a rating factor in determining auto insurance rates: California, Hawaii, Massachusetts and Michigan. 

Incidents: Rates were calculated by evaluating our base profile with the following incidents applied: clean record (base), at-fault accident, single speeding ticket and single DUI conviction.

Age: Rates were calculated by evaluating our base profile with the ages 25-70 (base: 40 years) applied. Depending on age, drivers may be a renter or homeowner. Age is not a contributing rating factor in Hawaii and Massachusetts due to state regulations.

Bankrate Scores

Our 2024 Bankrate Score considers variables our insurance editorial team determined impacts policyholders’ experiences with an insurance company. These rating factors include a robust assessment of each company’s product availability, financial strength ratings, online capabilities and customer and claims support accessibility. Each factor was added to a category, and these categories were weighted in a tiered approach to analyze how companies perform in key customer-impacting categories.

Each category was assigned a metric to determine performance, and the weighted sum adds up to a company’s total Bankrate Score — out of 5 points. Our scoring model provides a comprehensive view, indicating when companies excel across several key areas and highlight where they fall short.