What Liability Coverage Includes
Liability coverage is designed to protect you from financial loss if you’re responsible for an accident. It typically includes two main components: bodily injury liability and property damage liability. Bodily injury liability covers medical expenses, lost wages, and other related costs for the other party involved in the accident. Property damage liability, on the other hand, covers the cost of repairing or replacing the other party’s vehicle or other damaged property.
State Minimum Requirements
Every state except New Hampshire requires drivers to carry a minimum amount of liability insurance, though the specific requirements vary significantly by state. For instance, California drivers must carry liability insurance in the following amounts: $30,000 bodily injury liability per person, $60,000 bodily injury liability per accident, and $15,000 property damage liability per accident, often expressed as 30/60/15. While meeting these state minimum requirements keeps you legal, these coverage limits are often insufficient to fully protect your assets in the event of a serious accident.
Some states have particularly low minimum coverage requirements that could leave you financially vulnerable if you cause significant damage or injuries. Understanding your state’s specific minimum requirements is the first step in determining how much liability coverage you need.
The Best and Cheapest Liability Car Insurance Companies
Several insurance companies are known for offering the best and most affordable liability car insurance options. When it comes to finding cheap liability car insurance, it’s essential to compare rates and coverage from different providers.
GEICO: Cheapest Overall Provider
GEICO is often recognized for having the cheapest overall liability car insurance rates. Their streamlined online platform and efficient customer service make them a popular choice among drivers looking for affordable car insurance.
State Farm: Best for Drivers with Violations
State Farm stands out as a top choice for drivers with violations on their record. Despite having a history of accidents or tickets, drivers can still find competitive insurance rates with State Farm.
Progressive: Affordable Option for DUI Coverage
Progressive is known for offering affordable liability insurance options for drivers with a DUI on their record. Their Name Your Price feature allows drivers to choose their desired premium and customize their coverage accordingly, making insurance more accessible.
Travelers: Competitive Rates and Discounts
Travelers offers competitive rates and a variety of discounts that can help lower liability insurance premiums. Their coverage options are designed to be flexible, catering to different driver needs.
Nationwide: Best for Drivers with Bad Credit
Nationwide is particularly beneficial for drivers with poor credit, offering the most affordable liability-only coverage. Their rates average $865 annually, significantly lower than competitors like State Farm ($1,537) and Progressive ($1,007).
Nationwide’s credit-based pricing model shows the smallest premium increase for poor credit versus excellent credit among major insurers. Additionally, their SmartRide program offers discounts up to 40% regardless of credit score, providing an opportunity to offset credit-based rate increases.
Average Cost of Liability-Only Car Insurance
Understanding the average cost of liability-only car insurance is crucial for making informed decisions about your auto insurance coverage. The cost can vary significantly based on several factors.
Liability-Only vs. Full Coverage Cost Comparison
Liability-only car insurance typically costs less than full coverage insurance because it doesn’t include comprehensive and collision coverage. On average, drivers can expect to pay substantially less for liability-only coverage, making it an attractive option for those with older or low-value vehicles.
Cost comparison: For instance, a driver might pay $500 annually for liability-only coverage versus $1,500 for full coverage. This significant difference highlights the potential savings of opting for liability-only insurance when appropriate.
Factors That Affect Your Premium
Several factors influence your liability insurance premium, creating a complex pricing formula that varies by insurer. Some of the key factors include:
- Your driving history, with violations like speeding tickets and DUIs, causes rate increases.
- Age, with younger and older drivers typically paying more due to higher accident risks.
- Credit score, which affects rates in most states, with poor credit potentially increasing premiums by 40-50%.
- Location, as urban areas generally have higher premiums due to increased accident and theft risks.
- Vehicle type and usage, as well as your insurance history, also play crucial roles.
