When you own a car, you can be sure of a few expenses that go along with it. Those expenses include maintenance, fuel, repairs, and car insurance. While you can’t do much to change how much gas costs daily or the cost of new brake pads or rotors, you can shop around to keep your car insurance expense down. Most states require drivers to carry liability insurance as a bare minimum, so what can you expect from liability-only car insurance?
What Is Liability-Only Car Insurance?
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Each state has a minimum requirement for liability automobile insurance coverage for bodily injury and property damage. Bodily injury liability insurance covers any medical bills associated with injuries to another person from an accident where you’re the at-fault driver. The property damage portion will cover any damages to their vehicle or other property caused by the accident. Liability insurance does not pay out for your damages. Each state has its bare minimum liability requirements, and when you purchase insurance, you can talk to your insurance provider about those limits to ensure the law adequately covers you.
You may also want to consider increasing your limits on liability insurance, as the bare minimum may not always cover the damages incurred in an accident. Nowadays, many vehicles are worth more than the state-required minimum coverage for property damage. If you’re the at-fault driver in an accident with damages that exceed your insurance coverage, you could be held responsible for the balance. Often, increasing your limits adds only a few dollars to your premium each month, and it can be worth it in the long run.
What Are the Penalties for Not Having the Minimum Required Liability Insurance?
Penalties vary from state to state and include fines, suspension of driving privileges, probation, or jail time. Some states will require you to file SR-22 insurance after the reinstatement of your driving privileges to prove you have adequate insurance. While the filing fees for an SR-22 are minimal, your increased insurance premiums are the real expense. Depending on the state and the circumstance, you can be required to carry SR-22 insurance for one to five years.
What Are the Other Types of Automobile Insurance Coverage?
There are four main types of insurance, including liability. The other three types are comprehensive, collision, and uninsured/underinsured motorist coverages.
Comprehensive Coverage
Comprehensive insurance covers the repairs or replacement of your vehicle up to its actual value in the event of damage caused by a natural disaster, theft, or vandalism. Natural disasters can include fire, hail, flood, and tornado damages. You’ll have a deductible associated with comprehensive coverage, which is an amount that you’ll pay out of pocket toward the cost of your repairs or replacement. A higher deductible typically means a lower monthly premium. However, if you need to repair or replace your vehicle, you will need to account for the deductible coming from your finances.
Collision Coverage
Collision coverage pays for damages to your vehicle caused by you striking an object or another vehicle. If you hit a mailbox or the light pole at the gas station, collision coverage will pay to fix or replace it up to the vehicle’s actual value. Again, you will have a deductible with collision, and the amount you choose will be reflected in your monthly premium.
Both comprehensive and collision coverage are optional if you own your vehicle outright. If you have a loan or lien on your vehicle, your bank or lending institution will likely require that you carry comprehensive and collision insurance coverage on the vehicle for the length of the loan to protect their investment. In the event of a claim, the bank or lending institution will be paid first to pay off the loan. If there’s additional money owed on the loan, you’ll be responsible for the balance over and above the insurance coverage payment.
Uninsured/Underinsured Coverage
Uninsured/underinsured motorist coverage steps in to take up the slack from the other driver’s insurance when they’re at fault but lack sufficient insurance coverage. Uninsured motorist coverage pays for your medical and, in some cases, property damage if you’re involved in an accident with a driver who’s not carrying any insurance. Underinsured motorist coverage will pay the difference between what the insurance pays and the actual expenses. For example, if you have $25,000 in medical bills and the other driver’s liability only covers $10,000, your underinsured motorist coverage will pay the remaining $15,000.
Some states require drivers to carry uninsured/underinsured motorist coverage in addition to liability as bare minimum coverage, while others have it as an option. There are also medical payments and personal injury protection insurances available in some states. Talk to your insurance agent to determine what coverages are available and the best coverage for your circumstances.
What Is the Recommended Liability-Only Car Insurance Coverage?
There’s no one answer to this question, as the recommended amount will depend on your situation. However, most insurance companies recommend you carry the following liability-only car insurance limits:
- Bodily injury of $100,000 per person or $300,000 per accident
- Property damage of $100,000 per accident
This amount of coverage should protect you from any liability above and beyond your insurance coverage in most accidents. The difference between $25,000 per person and $50,000 per accident and this recommended coverage is usually a few dollars each month, making it worth every penny if you’re involved in a costly collision.
Who Has the Cheapest Liability-Only Car Insurance?
Many factors are used to determine the cost of your liability-only car insurance premium, including driver’s age, driving history, accident history, credit score, and where you live. No two drivers will get the same quote from the same company, so it’s vital to compare policies and prices among insurance providers.
ValuePenguin compiled a list of the cheapest liability-only car insurance companies for 2022, based on average minimum protection premiums. They also found the average monthly premium for liability-only insurance to be approximately $59. The cheapest insurers were as follows:
- USAA at $36
- Farm Bureau Insurance at $39
- Auto-Owners at $40
- Erie at $42
- State Farm at $44
- American Family $53
- GEICO at $56
All other insurance providers they examined were over the average of $59. The highest was Travelers at $86. That’s $50 more per month than the cheapest, so you can see what a difference your insurance company can make.
Take the time to get quotes from several agents before signing off on your liability-only car insurance policy. With several quotes to compare, you can be sure you’re getting the best value for your money.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.
