Cheapest Liability Car Insurance
State Farm has the cheapest liability rates among major car insurance companies — but you may find a better rate from a smaller company, depending on where you live. Here are tips for how to find cheap liability car insurance, as well as a look at what it covers and how much you’ll need.
What is liability car insurance?
Liability car insurance is auto coverage that pays for injuries and property damage you cause to others in a car accident.
Almost every state requires you to have liability coverage. Several states require you to buy other coverages, too.
Which company offers the cheapest liability car insurance?
State Farm has the cheapest liability car insurance of companies available nationwide. Its rates average $605 a year, or $50 a month.
Depending on where you live, you may find cheaper liability car insurance from a smaller company, such as Auto-Owners, Erie or a Farm Bureau affiliate.
USAA has the cheapest minimum liability car insurance overall, but it’s only available to current and former military members and their families.
Since insurance company rates vary by customer, it’s important to compare quotes from multiple companies to find the cheapest liability car insurance for you.
Cheapest minimum-liability car insurance rates
Rates are for a 30-year-old male with good credit and a clean driving record. Your rates may vary. *USAA is only available to the military community.
Who has the cheapest liability car insurance in my state?
State Farm has the cheapest minimum-liability car insurance in 18 states, while GEICO is cheapest in seven states plus the District of Columbia.
Auto-Owners offers the cheapest minimum-liability car insurance coverage in six states; Erie is cheapest in four.
Farm Bureau affiliates have the cheapest minimum-liability car insurance in five states: Kansas, Louisiana, Tennessee, Texas and Virginia.
Cheapest liability car insurance companies by state
Rates are for a 30-year-old male with good credit and a clean driving record. Your rates may vary.
How much does liability car insurance cost?
The average cost of minimum-liability car insurance is $777 a year, or $65 a month. Average rates range from $351 a year in South Dakota to $1,849 in Michigan.
In no-fault insurance states such as Florida, New Jersey and New York, minimum-liability policies also include personal injury protection (PIP). Minimum-liability policies include uninsured motorist coverage in states that require this coverage.
A minimum-liability policy costs an average of 61% less than full-coverage. Full coverage includes higher liability limits and collision and comprehensive, which cover your vehicle.
Average minimum-liability car insurance costs by state
Rates are for a 30-year-old male with good credit and a clean driving record. Your rates may vary.
How do liability limits work for car insurance?
Your liability limits are the maximum amounts your insurance company pays to cover injuries and damage you cause in a car accident.
Most companies offer split liability limits, but some offer a combined single limit or let you choose between split and single limits.
What are split liability limits?
Split liability limits provide separate limits for bodily injury (BI) and property damage (PD). The BI limits are further separated into amounts for injured individuals and a combined total for all people injured in an accident.
For example, a policy with $25,000/$50,000/$25,000 liability limits, often shortened to 20/50/25 coverage, pays the following amounts:
- Up to $25,000 in medical treatment for each injured person
- No more than $50,000 total for everyone injured in an accident
- Up to $25,000 total for damage to other people’s vehicles and/or property
What are combined single limits?
With a combined single limit, your insurance company covers the cumulative costs of injuries and damage you cause, up to the single limit you choose.
What’s the difference between split and single liability limits?
Split liability limits generally provide less flexibility than single limits over how insurance funds are distributed.
For example, a $75,000 combined single limit and a 25/50/25 split limit provide comparable amounts of coverage. However, there’s a difference in how they provide funds to an accident victim who requires $40,000 in medical treatment and $30,000 for their vehicle.
- A 25/50/25 split limit only covers $25,000 for the individual’s medical expenses and caps coverage for the vehicle at $25,000, which results in a $20,000 shortfall.
- A $75,000 combined single limit is high enough to cover the entire cost of the victim’s $70,000 claim.
How much liability car insurance do I need?
The amount of liability car insurance you need to drive legally will vary by state. However, the minimum liability limits your state requires may not provide enough financial protection, regardless of where you live.
If the amounts needed to cover an accident victim’s injuries or car repairs exceed your policy’s liability limits, you can be held personally responsible for the shortfall. This, in turn, could put your savings or other assets at risk of being seized.
Choosing liability limits that match your net worth protects your assets if you cause severe injuries or damage in an accident.
If you have a high net worth and/or a high salary, consider buying an umbrella policy for more protection.
Do my liability car insurance limits cover legal costs?
If you need to dispute a liability claim against you, your car insurance company also covers the costs of your legal defense.
These expenses — which may include legal fees and court costs — aren’t applied to your policy’s liability limits.
What does liability car insurance not cover?
The liability coverage in your car insurance doesn’t cover your own injuries or damage to your own vehicle. To cover these costs, add some or all of the coverages below to your car insurance:
- PIP and medical payments (MedPay) cover injuries you and your passengers suffer in a car accident, regardless of fault. PIP is required in about a dozen states. PIP and/or MedPay are optional in most other states.
- Uninsured motorist protection covers injuries you and your passengers suffer in an accident caused by a driver without insurance. About 20 states require this coverage, and it’s optional in most others.
- Collision covers damage your vehicle sustains in a collision with another vehicle or object, or if it overturns.
- Comprehensive covers your vehicle for theft or damage from non-collision causes, like fires, floods, falling objects and vandalism.
- Collision and comprehensive aren’t required by law, but both typically are required for a car loan or leased vehicle.