What Is Liability Only Car Insurance
It covers what you do to someone else's car or body, not what happens to you or your own vehicle.
It pays for the other driver, not for you
Liability only car insurance pays for the other person's car repairs and medical bills when you're at fault in an accident. It doesn't pay to fix your own car, and it doesn't cover your medical bills no matter who caused the crash.
Most states require some amount of liability coverage to register and drive a car legally. Beyond that minimum, how much you carry and whether you add anything else depends on what your car is worth and what you can afford to pay out of pocket if something goes wrong.
What your car is worth changes whether this makes sense
Liability only tends to make financial sense when a car is worth little enough that paying for collision or comprehensive coverage on it isn't worth the cost. If the car were totaled tomorrow, liability only means you'd get nothing from your insurer toward a replacement.
If you're still making payments on the car, your lender almost certainly requires you to carry collision and comprehensive, not just liability. Check your loan agreement or ask your lender before you drop anything.
If the car is paid off and worth relatively little, some drivers decide the cost of full coverage isn't worth it compared to what they'd recover in a claim. That's a judgment call about your own finances, not a rule that applies to everyone.
It's worth getting the car's current value from a source like an online valuation tool before you decide. A car that feels old can still be worth more than you'd guess, and that changes the math.
The state minimum may not be enough to protect you
Each state sets its own minimum liability limits, and those minimums were often set years ago. They may not reflect what a serious accident actually costs today in medical care or vehicle repair.
If you cause an accident and the damage or injuries cost more than your liability limits cover, you're personally responsible for the difference. The other driver, or their insurer, can pursue you for the rest.
Some drivers carry liability limits higher than their state's minimum for this reason, even if they skip collision and comprehensive on their own car. Ask your insurer what the state minimum is where you live and what it would cost to raise it.
Your driving record and the kind of driving you do also matter here. Someone who drives often or in heavy traffic is taking on more risk at the minimum than someone who drives rarely.
Questions people ask about this
Does liability only insurance cover a rental car?
It depends on the rental company's policy and your own insurer, so you'll need to check both before you rely on it. Liability only coverage generally doesn't extend to damage to the rental car itself, only to damage you cause to someone else. Ask your insurer directly whether your policy extends to a rental at all.
Can I switch from full coverage to liability only anytime?
Yes, in most cases you can change your coverage at any point, not just at renewal. Call your insurer or your agent and ask them to make the change, and ask when it takes effect. If you have a loan on the car, check with your lender first, since they may require you to keep full coverage.
What happens if I cause an accident that costs more than my liability limits?
You're responsible for the amount beyond what your policy pays. The other driver or their insurer can take legal action to recover the difference from you directly. This is the main reason some drivers choose limits above their state's minimum even when they skip coverage for their own car.
Will my liability only policy pay if someone else damages my car?
No. Liability only coverage pays for damage and injuries you cause to others. If another driver damages your car, you'd typically file a claim against their liability coverage instead, not your own policy.
Is liability only insurance cheaper than full coverage for an older driver?
It's generally less expensive than full coverage because it covers less, but how much less depends on your car, your driving record, and your insurer. Ask for a quote with both options so you can compare the actual difference for your situation rather than assuming.
Compare quotes to see what liability only coverage would actually cost you against full coverage.
Start by finding out what your car is worth right now using an online valuation tool. Pull out your current policy and check what coverage your lender requires, if you have a loan. Call your insurer or agent and ask what your state's minimum liability limits are and what raising them would cost. Ask them directly what would happen to your coverage if you switched to liability only. Then get a quote for both liability only and full coverage so you're comparing real numbers for your car, not guesses.
