The Cheapest Liability Car Insurance Companies of 2023

If you’re looking for the most affordable car insurance, you might consider choosing a liability-only policy. Liability insurance covers the other driver’s injuries and vehicle damage if you cause a collision.

In comparison, “full coverage” — which typically includes collision and comprehensive coverage alongside liability — pays for damages to both your vehicle and the other driver’s car. Since liability insurance provides less coverage, you’ll pay less for your annual premiums.

Auto-Owners, GEICO, and State Farm are the cheapest coverage options for liability-only insurance. And with the right strategies, you can find ways to save even more.

Key Takeaways:

• Auto-Owners has the cheapest liability-only coverage, with an average monthly car insurance rate of $40.
• Liability-only car insurance is less expensive than purchasing full coverage.
• Liability coverage only pays for injuries and damages to the other vehicle if you cause an accident, not your own.

Cheapest Companies for Liability-Only Car Insurance

The table below outlines the cheapest options for liability-only car insurance.

Auto-Owners is the least expensive option for liability coverage, with a $40 average monthly quote. The company offers competitive auto insurance rates for different types of drivers, including those who drive new and classic cars.

GEICO and State Farm are also affordable options for drivers looking for liability insurance. GEICO, in particular, is known for its wide variety of car insurance discounts. You can earn a discount for being a federal employee, taking a defensive driving course, or having certain safety features in your car.

State Farm is one of the best options for young drivers, too. Teen drivers can earn a 25% discount for maintaining good grades — and the savings will last until they turn 25.

How to Find Cheap Liability-only Car Insurance

Liability-only insurance is naturally less expensive than full coverage, but there are additional ways to find cheap car insurance. Your driving history, credit score, and even your age are some of the factors that determine your car insurance premiums.

For example, someone with a clean driving record will always pay less for auto insurance than a driver with a history of DUIs or at-fault accidents. Here are four ways to find cheap liability-only car insurance:

• Take advantage of discounts: Most auto insurance companies offer discounts to policyholders. For example, you could earn a discount for maintaining a good driving record, bundling auto insurance policies, owning a home or taking an approved defensive driving class.

• Choose a safer vehicle: The type of car you drive affects how much you pay for insurance. Buying a car that’s highly rated for safety by the Insurance Institute for Highway Safety (IIHS) can help you save money on insurance.

• Maintain a good credit score: Car insurance companies consider your credit rating when evaluating you for auto insurance. That’s because drivers with good credit typically file fewer claims, according to the Insurance Information Institute. So, maintaining a good credit score can help you save on insurance.

• Shop around: The price of car insurance can vary widely depending on the company, which is why you should always shop around. Apply for car insurance quotes from at least three different companies — or use an insurance comparison site — to find the best car insurance for your situation.

Liability vs. Full Coverage: What to Know

When shopping for auto insurance, the first choice you’ll have to make is whether to purchase liability or full-coverage insurance. You should know that liability insurance is required in almost all states, but full coverage isn’t. Both policies cover different things, and full-coverage costs more than liability insurance because it offers additional protection.

Liability-only insurance typically meets your state’s minimum-coverage requirements for auto insurance. If you’re involved in an accident, liability insurance pays for damages to the other drivers, but your vehicle won’t be covered.

On the other hand, full coverage includes comprehensive, collision, and liability insurance. It may also include roadside assistance or cover you if you’re involved in an accident with an uninsured driver. Most lenders and leasing companies may require you to carry full coverage if you have a car loan or lease your vehicle.

The Cost of Liability Car Insurance in Your State

Where you live plays a significant role in determining your auto insurance costs. For example, drivers who live in areas with high vandalism or crime rates pay more for car insurance. The table below outlines what you can expect to pay for car insurance in different states, as well as the cheapest car insurance companies in each.

On average, South Dakota, Vermont, and Iowa are the least expensive states in which to buy auto insurance. While GEICO is often the cheapest company, there are cases where a small, regional insurer is the least expensive option. Georgia and Indiana are good examples of this, so comparing quotes from multiple companies is crucial.

When to Get Liability-Only Car Insurance

Liability-only policies can help you save money on car insurance, but you’ll be trading additional coverage for those savings. Here are three instances when choosing liability insurance makes sense.

Scenario 1: Your car loan is paid off

If your vehicle is paid off and you have the money to pay for any damages out of pocket, liability-only insurance may make sense for you. But make sure you have the savings to minimize the financial burden if you cause an accident.

Scenario 2: You own an older, less-expensive car

You can also choose liability-only insurance if you have an older vehicle. A 10-year-old car likely won’t be worth very much, so a liability-only policy may be sufficient. If your vehicle is worth less than the cost of the car insurance policy, full coverage may not be necessary.

Scenario 3: You’re planning on buying a new car

If you’re planning to buy another car soon and wouldn’t want to repair your vehicle after an accident anyway, liability insurance may be a good idea. You can use the money you’re saving on auto insurance to save up for a new vehicle.

Other Car Insurance Coverages to Know

You can choose from at least six types of insurance when shopping for auto insurance. Understanding what’s included in each can help you find the right auto policy for your situation.

Liability coverage

Liability coverage comes in two parts: bodily injury liability and property damage liability. Bodily injury liability pays for any medical bills and lost wages due to the accident, and property damage liability covers damage to the other driver’s vehicle or any other personal property.

But liability insurance only pays for injuries the other driver sustains or damages to their vehicle. You’ll be responsible for covering your own injuries and damages related to the accident.

Uninsured and underinsured motorist coverage

This type of coverage reimburses you if you’re involved in an accident with an uninsured or underinsured driver. It also protects you if you’re the victim of a hit-and-run or struck by a vehicle as a pedestrian.

Comprehensive coverage

Comprehensive coverage pays for damages to your vehicle by something other than a car accident. For example, comprehensive coverage would kick in if your car is vandalized, broken into, or hit by a falling object.

Collision coverage

Collision coverage pays for damages caused by an accident with another car or object. For example, collision coverage kicks in if you accidentally drive into a light pole or tree. Collision coverage is usually sold as a separate policy with its own deductible.

Personal injury protection (PIP)

Personal injury protection (PIP) is mandatory coverage in no-fault states, but the specific coverage details vary depending on where you live. It can cover  medical bills, lost wages, child care costs, and funeral expenses.

Medical payments coverage (MedPay)

Medical payments coverage (MedPay) pays for the medical coverage for you and any passengers involved in an accident. MedPay is similar to PIP, but it doesn’t cover lost wages or other out-of-pocket expenses.

Cheap Liability Insurance FAQs

Choosing between liability and full-coverage car insurance is a big decision. If you have additional questions about liability-only insurance, the following frequently asked questions may help.

What does cheap liability insurance typically cover?

Liability-only insurance includes bodily injury and property damage liability. It’ll pay for any damages to the other driver’s vehicle, as well as their hospital bills and lost wages.

How do I know if cheap liability insurance is right for me?

If you have a car that’s over 10 years old or is paid off, choosing liability-only insurance may be a good idea. But you should make sure you have enough money in your savings to cover any out-of-pocket expenses from an accident.

Which company has the cheapest liability insurance?

Auto-Owners is the cheapest liability insurance, at just $40 per month. GEICO and State Farm also offer affordable rates for most drivers. Different companies have different insurance requirements, so the best way to find cheap auto insurance is by shopping around and comparing your options.

How do I read liability limits?

The following numerical format represents liability insurance limits: 50/100/50. This means you have a coverage limit of $50,000 limit per person for bodily injury, a $100,000 total limit per accident for bodily injury, and a $50,000 limit per accident for property damage.

Methodology: 

Data scientists at Compare.com analyzed more than 50 million real-time auto insurance rates from more than 75 partner insurance providers in order to compile the quotes and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information. All of the quotes listed in this article have been gathered from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide drivers with insight into how auto insurance companies determine their premiums.

Sources: 

1. NAIC “Auto Insurance,” Accessed Aug. 10, 2023.
2. Insurance Information Institute, “How to save money on car insurance,” Accessed Aug. 9, 2023.
3. Unruh Insurance Agency Inc, “Liability Only Car Insurance: Is It Ever a Good Choice?” Accessed Aug. 10, 2023.
4. NAIC, “A Consumers Guide to Auto Insurance,” Accessed Aug. 10, 2023.
5. Insurance Information Institute, “What determines the price of an auto insurance policy?” Accessed Aug. 9, 2023.
6. Insurance Information Institute, “What is covered by a basic auto insurance policy?” Accessed Aug. 9, 2023.
7. Insurance Information Institute, “Background on: No-fault auto insurance,” Accessed on Aug. 9, 2023.