Liability-only car insurance is typically suited for drivers who own their vehicle outright, have an older car with low market value, or are considered high-risk and need to minimize premium costs. It provides the minimum coverage required by state law to cover injuries or damages you cause to others, but offers no protection for your own vehicle.
This type of policy is a financial calculation. If your car's annual premium for full coverage (which includes comprehensive and collision) is close to or exceeds 10% of the car's current value, switching to liability-only might be a prudent money-saving move. For example, insuring a car worth $2,000 with a $1,200 annual full-coverage premium often doesn't make financial sense.
The following table outlines the minimum liability coverage requirements in a few states, demonstrating the baseline legal protection.
| State | Bodily Injury Liability (per person / per accident) | Property Damage Liability |
|---|
| Florida | $10,000 / $20,000 | $10,000 |
| California | $15,000 / $30,000 | $5,000 |
| New York | $25,000 / $50,000 | $10,000 |
| Texas | $30,000 / $60,000 | $25,000 |
| Alaska | $50,000 / $100,000 | $25,000 |
It's crucial to understand the risk. If you cause an accident, liability insurance will not pay for your own car's repairs or medical bills. This makes it a suitable option for drivers who have the financial means to cover their own potential losses. It's also common for individuals with a poor driving record who find full coverage prohibitively expensive, though some may be required by their state to file an SR-22 form as proof of financial responsibility. Before making the switch, honestly assess your ability to absorb the cost of replacing your vehicle if it's totaled in an at-fault accident.
