Heads Up: The Fed continues to raise rates — up 3% this year — making credit card debt even costlier.
Pay it off today with a low fixed-rate personal loan. View your rate —>

Average Cost of Liability-Only Car Insurance

By Sarah Li Cain · December 18, 2022 · 6 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

Average Cost of Liability-Only Car Insurance

Many drivers choose liability-only car insurance to save money. The average annual premium is $1,070, according to the Insurance Information Institute. However, this type of coverage is not a good fit for everyone.

We’ll discuss exactly what liability-only insurance is, what it covers, and whether it’s the right choice for your needs.

What Is Liability Car Insurance?

Liability-only car insurance is a type of policy that provides the minimum protection that’s legally required by your state. More specifically, it covers the cost of bodily injury and property damage for other drivers and vehicles, up to a set limit, if you’re found at fault in a car accident. A liability-only policy is usually the most affordable car insurance you can get.

What Does Liability Car Insurance Cover?

There are two kinds of protection for liability-only car insurance: property damage and bodily injury coverage:

•   Property damage: Pays for others’ medical bills, lost wages, and expenses due to pain and suffering if the policyholder is found at fault. It can also cover legal bills if you’re sued over the accident, also up to the policy limit. (Find out how much car insurance goes up after an accident.)

•   Bodily injury: Pays for damages to another person’s vehicle and property if the policyholder is found at fault.

How Does Liability Car Insurance Work?

Liability car insurance will pay up to a certain dollar limit. If damages or bills exceed that limit, you’re responsible for the remainder. While it’ll cover things like medical bills and car repairs for others, this type of policy won’t pay for repairs to your own vehicle or your medical bills.

Recommended: Insurance Tips for First-Time Drivers

Liability Car Insurance Coverage Requirements by State

Most states require car insurance, though the minimum coverage requirements vary. See below for a state by state breakdown.

State

Minimum Coverage Requirements

Minimum Bodily injury per person

Minimum bodily injury per accident Minimum property damage per accident
Alabama $25,000 $50,000 $25,000
Alaska $50,000 $100,000 $25,000
Arizona $25,000 $50,000 $15,000
Arkansas $25,000 $50,000 $25,000
California $15,000 $30,000 $5,000
Colorado $25,000 $50,000 $15,000
Connecticut $20,000 $50,000 $25,000
Delaware $25,000 $50,000 $10,000
District of Columbia $25,000 $50,000 $10,000
Florida N/A N/A $10,000
Georgia $25,000 $50,000 $25,000
Hawaii $20,000 $40,000 $10,000
Idaho $20,000 $50,000 $15,000
Illinois $25,000 $50,000 $20,000
Indiana $25,000 $50,000 $10,000
Iowa $20,000 $40,000 $15,000
Kansas $25,000 $50,000 $10,000
Kentucky $25,000 $50,000 $10,000
Louisiana $15,000 $30,000 $25,000
Maine $50,000 $100,000 $25,000
Maryland $30,000 $60,000 $15,000
Massachusetts $20,000 $40,000 $5,000
Michigan $20,000 $40,000 $10,000
Minnesota $30,000 $60,000 $10,000
Mississippi $25,000 $50,000 $25,000
Missouri $25,000 $50,000 $25,000
Montana $25,000 $50,000 $10,000
Nebraska $25,000 $50,000 $25,000
Nevada $25,000 $50,000 $20,000
New Hampshire $25,000 $50,000 $25,000
New Jersey $15,000 $30,000 $5,000
New Mexico $25,000 $50,000 $10,000
New York $25,000 $50,000 $10,000
North Carolina $30,000 $60,000 $25,000
North Dakota $25,000 $50,000 $25,000
Ohio $25,000 $50,000 $25,000
Oklahoma $25,000 $50,000 $25,000
Oregon $25,000 $50,000 $20,000
Pennsylvania $15,000 $30,000 $5,000
Rhode Island $25,000 $50,000 $25,000
South Carolina $25,000 $50,000 $25,000
South Dakota $25,000 $50,000 $25,000
Tennessee $25,000 $50,000 $15,000
Texas $30,000 $60,000 $25,000
Utah $25,000 $65,000 $15,000
Vermont $25,000 $50,000 $10,000
Virginia $30,000 $60,000 $20,000
Washington $25,000 $50,000 $10,000
West Virginia $25,000 $50,000 $25,000
Wisconsin $25,000 $50,000 $10,000
Wyoming $25,000 $50,000 $20,000

Data courtesy of the Insurance Information Institute

How Much Is Liability Only Car Insurance by State

State

Average National Monthly Premium

Average National Annual Premium

Alabama $43.93 $527.20
Alaska $48.74 $584.90
Arizona $51.88 $622.55
Arkansas $40.36 $484.37
California $51.89 $622.77
Colorado $58.73 $704.82
Connecticut $66.62 $799.45
Delaware $74.82 $897.87
District of Columbia $68.28 $819.36
Florida $83.10 $997.20
Georgia $83.10 $997.20
Hawaii $39.90 $478.83
Idaho $36.13 $433.66
Illinois $43.42 $521.11
Indiana $37.08 $444.98
Iowa $29.19 $350.31
Kansas $35.51 $426.14
Kentucky $50.83 $609.98
Louisiana $85.32 $1,023.91
Maine $31.28 $375.40
Maryland $62.43 $749.18
Massachusetts $55.41 $664.92
Michigan $81.62 $979.47
Minnesota $41.86 $502.32
Mississippi $45.37 $544.43
Missouri $43.96 $527.59
Montana $36.47 $437.69
Nebraska $35.97 $431.71
Nevada $77.14 $925.71
New Hampshire $36.87 $442.52
New Jersey $79.86 $958.31
New Mexico $48.68 $584.25
New York $77.70 $932.46
North Carolina $32.67 $392.06
North Dakota $26.02 $312.30
Ohio $37.32 $447.86
Oklahoma $42.06 $504.79
Oregon $57.06 $684.81
Pennsylvania $45.71 $548.58
Rhode Island $76.52 $918.30
South Carolina $59.60 $715.26
South Dakota $28.09 $337.11
Tennessee $39.95 $479.43
Texas $54.18 $650.17
Utah $51.26 $615.15
Vermont $31.17 $374.06
Virginia $40.96 $491.51
Washington $58.76 $705.11
West Virginia $42.93 $515.20
Wisconsin $35.10 $421.21
Wyoming $29.67 $356.08

Data courtesy of the Insurance Information Institute

Liability Car Insurance vs Full Coverage

How much auto insurance you need depends partly on whether you can afford to repair or replace your car. Full coverage will pay for your car repairs and medical bills after an accident, no matter who is at fault.

It also covers repairs or replacement of your vehicle for covered “perils” (an auto insurance term) like theft, fire, flood, collisions with animals, vandalism, and falling objects. Because of the additional features, full coverage car insurance tends to cost much more than liability insurance.

When To Drop Comprehensive and Collision Coverage

Because your insurance needs change over time, it makes sense to reevaluate those needs on a regular basis with a personal insurance planning session. In some cases, you may find that it makes sense to drop comprehensive and collision coverage:

•   You’re not currently driving your vehicle: If your car is parked in a garage or at home and you don’t intend to drive it, comprehensive coverage doesn’t make sense. However, you may want to keep collision coverage because it protects against perils such as theft, fire, and vandalism.

•   Your car has a low market value: If your car is worth less than a few thousand dollars, getting pricey repairs — after you pay your deductible — may not be worth it. (Learn about the different types of insurance deductibles.)

Recommended: How to Save Money on Car Maintenance

How To Shop for Liability-Only Car Insurance

The first step in getting car insurance is determining how much you need. You must purchase the minimum coverage required by your state. If you want more financial protection — especially if you’re worried about medical bills and car repairs for expensive vehicles — then consider a higher coverage limit to give you more peace of mind.

Then it’s time to shop around on online insurance sites to get a sense of the going rates. Factors to look for include what is a covered peril and the insurer’s customer reviews.

The Takeaway

Liability-only car insurance is best suited for drivers with low-value vehicles who want to save money. Keep in mind that liability policies don’t cover your own medical bills or vehicle after an accident. If you want this protection, you may be better off paying more and purchasing full coverage.

Shopping around is the best way to find a policy that suits your needs. SoFi makes it easy by helping you compare rates from top insurers in just minutes.

Real rates, with no bait and switch.

FAQ

Do I need liability insurance when renting a car?

You don’t need to have your own auto insurance policy when renting a car, as rental car companies typically have their own coverage. However, you can purchase collision or comprehensive insurance while renting a vehicle if you want additional coverage.

At what point is full coverage not worth it?

Full coverage auto insurance typically is not worth it if your vehicle has a low value or you don’t intend to drive your vehicle for a long period.

When should I go from full coverage to liability?

Going from full coverage to liability requires careful consideration. In most cases, if your vehicle is worth less than what your deductible will cost, it might be time to drop down to liability coverage.


Photo credit: iStock/Antonio_Diaz

Insurance not available in all states.
Gabi is a registered service mark of Gabi Personal Insurance Agency, Inc.
SoFi is compensated by Gabi for each customer who completes an application through the SoFi-Gabi partnership.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SOPT1022002

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store
SoFi Android App, Get it on Google Play

TLS 1.2 Encrypted
Equal Housing Lender