Cheap Liability Car Insurance
State minimum liability only auto insurance is the cheapest insurance policy available. The prices and limits of required coverage will vary based on what state you live in. This kind of insurance policy only protects you from the damage you do to the other person’s vehicle or bodily injury, it doesn’t cover your vehicles damages.
You would need to purchase full coverage insurance if you want your vehicle covered in the event of an accident.
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Liability only auto insurance is a lot cheaper than full coverage insurance, but it does present some risk due to giving up substantial coverages. For example, if you have liability only and your car is stolen the insurance will not pay anything in this situation. You should consider the cost of repair for your vehicle before you decide on which coverages to select. Figuring out the value of your car and your tolerance for financial risk is a good guide to help you make the right decision.
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Which auto insurance company has the cheapest liability insurance?
There are a lot of auto insurance carriers out there that offer affordable liability car insurance. Since most all auto insurance companies want all the liability only business, they can get they fight fiercely to get those customers. The more these insurance companies compete the more you as the insured will save. The reason why insurance companies fight so hard to write all the liability business they can is because they don’t have to pay claims on the physical damage to the vehicles, they insure just the damage to a 3rd party that vehicle does. Also, when natural disasters occur like flood and hail insurance co not pay out on these claims if their customers just have liability only. But if their customers have full coverage, they pay out millions of dollars in claims.
Click here to watch more about the best auto insurance carriers for liability insurance
So, it is very hard to say one company is the cheapest for liability only insurance in every situation. Each auto insurance company has their niche of business they are best in whether it be age or zip code and so many other scenarios. Here are a few of the top companies we found that offer the cheapest liability insurance policies:
- State Farm
- Farm Bureau
- Save Money Car Insurance
- Fred Loya
- Safe Auto
Click here to read more about the best auto insurance carriers
So, as you can see there are a large selection of companies to choose from for cheap liability insurance but it really depends on your situation to be able to lead you to the right company. No website can say this company is the cheapest for a certain segment of business, that is just not accurate information.
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Should I switch to Liability only auto insurance?
Full coverage insurance is most important when you have a newer vehicle or one that is financed. Most lienholders will require you to carry full coverage if you are financing the vehicle. Full coverage becomes less important as your car gets older and once it is not financed any longer. It can be a wise decision to drop comprehensive and collision coverage at a certain point. There are a few reasons why this is, the first one being an auto insurance claim is paid based on the actual cash value of the vehicle not the cost new. So, if your car is 30 years old and it is totaled the insurance company would not pay you anything for the car and you will have wasted all those full coverage insurance premiums all those years.
If your car is involved in a total loss, your insurance company will write you a check for the car’s value at the time of the loss. Insurance companies choose to total your car when the price to repair it is more expensive than the value of the car. When your car is newer it is going to cost a lot more to repair than older cars. So, on newer cars new cars insurance companies will spend a lot more repairing them in the event of a claim. So, a good example of how this plays out in real life is let's say your new vehicle’s ACV is $15,000 then the insurance company will pay you a maximum amount of $15,000 in the event of a covered accident. As your car ages however that ACV will continue to lower. But on the bright side as your vehicle ages your full coverage insurance premiums should decrease as well because the risk for the insurance carriers drops as the vehicle gets older. This is not the case for a liability only policy. Most auto insurance companies do not look at value of vehicle when rating for liability only policies because they do not pay out on the covered vehicle itself in event of an accident just the damage the car does to a 3rd party. So, this makes full coverage not so good of a deal if you have an older car. Once your vehicle reaches a certain age it is not worth carrying full coverage at all.
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What is liability only auto insurance?
Liability only auto insurance is the purchase of the state required bodily injury and property damage limits with no extra coverages. It is designed to give protection for anyone who drives a car and other vehicles on the road from damages another person or vehicle does on the road. Every state requires a certain amount of coverage to be legal to drive. This liability only coverage just covers the damage you do to other people or their vehicle up to the limits of you policy, it will not exceed those limits. There are several other coverages in addition to liability coverages. Here are some additional optional coverages
you can add to your liability insurance policy to provide you more protection and coverage and here they are:
- Medical Payments
- Uninsured Motorist Coverage
It is important to remember the more coverages you add on the more you will pay on your monthly premiums. So be sure to get quotes from your insurance agent or company before you add on any coverages.
Click here to read more about different types of auto insurance coverage
How much cheaper is liability only insurance coverage?
Liability only auto insurance coverage is much cheaper than full coverage insurance. Your auto insurance premiums could drop in half by cutting out all the extra coverages. But it is important to remember that when you cut the coverage you will save money but you will lose protection and potentially important coverages. Removing comprehensive and collision coverage puts you at more risk financially in the event of an accident. We recommend checking with your insurance agent before ever removing coverages.
If you do choose to purchase state minimum liability only auto insurance the policy would not pay for any damages done to your car. In addition to this it will also not cover the following:
- If you are a victim of a hit and run (if you are not required to have uninsured motorist coverage in the particular state you live in)
- Your car is damaged by weather
- If you were to hit a deer
- If your car is vandalized or stolen.
Click here to read more about different types of auto insurance coverage
How to find the cheapest liability auto insurance
When shopping for the cheapest liability policy out there it is important to get as many quotes as possible, this will greatly increase your chances of finding low rates. We have found that the price for liability coverage does not correlate with the cost of more full featured insurance policies. So, just because an auto insurance carrier gives you the best rate for full coverage does not necessarily mean they will be the cheapest for liability only. Each insurance company has their niche markets so some are great with full coverage and others are great with state minimum liability. But no matter which company you choose for liability insurance most all of them have the basic same discounts. So, we have some discounts that you always need to ask your insurance agent or company for when you are looking for liability only auto insurance quotes and here they are:
- Sign up for Auto Pay
- Enroll in Paperless Billing
- Take a defensive driving course
- Pay your policy in full for 6 months
One of the best ways to find the cheapest liability car insurance is to keep a safe driving record for 3 years. Drivers with a bad driving record pay the most for liability insurance.
Click here to read more about finding cheap liability car insurance with a bad driving record.
When to drop full coverage insurance
Most experts suggest dropping full coverage insurance when the combined yearly premium amount plus your deductible amount is equal or great than the actual cash value of the vehicle.
A real-life example would be if your car is worth $1400 and your yearly premium for insurance is $800 with a $500 deductible then the maximum amount you would receive from the auto insurance company in the event of a covered accident would not make it worth keeping full coverage insurance going. There would be not benefit of paying for full coverage insurance in this situation.
Click here to read more about full coverage insurance deductibles
If your vehicle value has not reached this threshold yet than the decision is not as clear cut. A good question to ask yourself is can you afford to replace the vehicle in the event of a total loss? Or could you arrange a temporary means of transportation during the claims process. We recommended not dropping full coverage if you answer is no to both of these situations.
Here are some additional situations that may point to you being ok with doing liability only insurance:
- You can afford to replace your vehicle if it was stolen.
- If generally you have a high tolerance for financial risk.
- You do not drive the car often or have alternate transportation options.
- You are not at risk for being involved in an accident (an example would be someone who works at home and just doesn’t get out on the road much)
- You are not at risk for your car to be stolen (an example of this would be your car is kept in a garage)
It is important to remember that if your car is financed then in most all cases you will be required to carry full coverage regardless of the vehicle value. Most auto finance companies require you to carry full coverage so they protect their investment in case your car is totaled in the event of an accident.
If you do decide to drop your coverages to the cheapest liability policy available it is wise to keep an emergency fund available and ready to use in case your car is needing repairs. Some companies will allow you to carry state minimum liability limits and comprehensive coverage. That way you still have coverage for theft, hail, and hitting a deer for a fairly cheap price. Not many companies offer this but the ones who do really offer a nice perk for the customer.
What is covered under the bodily injury limit of my auto policy?
The bodily injury liability portion of your policy pays for claims related to injuries involved in an accident where you were at fault in the incident. It covers damages from the bodily injury that occurred, normally the medical bills, damaged property, or loss of wages. It is important to make sure you have the proper bodily injury liability protection. If you have an at fault accident and do more damage than your policy limits cover then the other party can sue you for the remaining damages. We recommend consulting your insurance agent or company about how much bodily injury coverage you need.
Click here to watch more about the importance of carrying liability car insurance
Additional Resources to help you find the best auto insurance out there:
Cheap Liability Auto Insurance FAQs
Should I get liability only insurance?
Liability only auto insurance only covers the damage you do to a 3rd party and not your vehicle or medical bills. Drivers with older less expensive cars it is probably not wise to pay for full coverage insurance. If your vehicle is newer and expensive however then it is a good idea to carry full coverage. Also, if your car is financed then you will be required to carry full coverage insurance by your finance company.
What is supplemental liability car insurance when I rent a car?
All cars on the road are required to carry state minimum liability limits even if the car is a rental. In most cases if you are carrying an active insurance policy on your car the liability coverage should transfer. But not the physical damage to the rental car. So, we recommend purchasing the comprehensive and collision insurance from the rental car company to be safe.
Click here to read more about the importance of purchasing insurance on a rental car
What happens if my car is totaled and I have liability only car insurance?
If your vehicle is totaled and you are carrying liability only insurance you will be responsible for all damages done to your car. Liability only just pays for 3rd party damages.
Click here to read more about the importance of carrying state minimum liability insurance”
What does liability insurance cover on my car insurance policy?
The liability section of your auto insurance policy covers the bodily injury and property damage you cause to a 3rd party in an accident. The limits on your policy are the maximum amount the insurance company will pay in the accident.