Liability-Only Car Insurance: Finding The Best Options For Your Needs
Navigating the world of car insurance can feel overwhelming, especially when faced with rising costs. Many drivers are tempted to only purchase the most basic policy, liability car insurance, to save money. While this can be a suitable solution for some, choosing the right liability-only policy is crucial to ensure you’re protected. This article analyzes six top companies that stand out for their customer service, affordability, discounts, and flexibility with credit, providing a comprehensive guide to finding the best liability-only auto insurance for your situation.
Key Takeaways:
- Liability car insurance is the most basic policy, covering damages to another vehicle or person if you’re found at fault in an accident. It is mandatory in most states.
- Our analysis reveals six standout companies for liability-only car insurance: Erie, State Farm, Progressive, Auto-Owners, Travelers, and USAA.
- Each company excels in different areas: Erie shines for customer service, State Farm caters to families, Progressive offers a wide array of discounts, Auto-Owners is best for drivers with a less-than-perfect driving record, Travelers provides good rates for those with bad credit, and USAA excels for military members and veterans.
- Don’t settle for just any liability-only policy, carefully compare options and choose the right fit for your individual needs.
Best for Customer Service: Erie Auto Insurance
Erie Auto Insurance emerged as a top performer in J.D. Power’s 2024 insurance shopping survey and earned the second-highest score for claims satisfaction. Its low complaint index compared to other providers makes it a great option for those seeking a smooth and positive customer service experience.
Standout Benefits: Erie’s Rate Lock® feature ensures your premiums won’t increase as long as you maintain the same policy, even if you file a claim.
Best for Families: State Farm Auto Insurance
State Farm stands as the largest car insurance company in the U.S., known for its strong customer satisfaction ratings. Families can benefit from several family-oriented perks, including a discount of up to 25% for good student grades and a multi-vehicle discount of up to 20%.
Standout Benefits: Bundling State Farm auto insurance with homeowners or renters insurance can save you up to $1,200 annually.
Best for Discounts: Progressive Auto Insurance
Progressive offers an impressive selection of discounts, exceeding 12, including those for homeowners and upfront premium payments.
Standout Benefits: Progressive automatically forgives your first claim under $500, protecting your rates from unnecessary increases.
Best for a Bad Driving Record: Auto-Owners Insurance
Auto-Owners is an ideal choice for drivers with a less-than-perfect driving record, including at-fault accidents, speeding tickets, or DUIs. It provides below-average rates for high-risk drivers and offers SR-22 certificates to meet state requirements for high-risk classifications.
Standout Benefits: Auto-Owners provides three discounts geared towards young drivers, including a good student discount worth up to 20%.
Best for Bad Credit: Travelers Auto Insurance
Travelers offers competitive rates for drivers with bad credit. It’s the sixth largest auto insurer in the U.S. by market share, providing solid financial strength and peace of mind.
Standout Benefits: Travelers’ IntelliDrive app can save you up to 30% on your annual premium by monitoring your driving habits.
Best for Military Members and Veterans: USAA Auto Insurance
USAA specifically serves military families and veterans with excellent coverage available across all 50 states. Its stellar customer satisfaction scores and strong financial track record add to its appeal.
Standout Benefits: USAA offers unique discounts related to military service, including reductions for deployments and on-base vehicle storage.
Understanding Liability Car Insurance
Liability car insurance is designed to cover damages to another vehicle or person if you’re deemed responsible for an accident. While it’s a common requirement for driving, it’s essential to understand its limitations and what it does not cover.
What Liability Insurance Covers
- Bodily injury liability: This component covers medical bills, lost wages, pain and suffering compensation, funeral costs, and legal expenses for the other party involved in an accident.
- Property damage liability: Covers damages to another person’s vehicle or other property, such as a mailbox or fence.
What Liability Insurance Doesn’t Cover
- Repairs to your vehicle: To cover damages to your own vehicle, you’ll need collision insurance.
- Medical expenses for yourself or your passengers: You’ll need medical payments coverage (MedPay) or personal injury protection (PIP) for this.
Determining How Much Liability Insurance You Need
Each state has specific minimum coverage requirements for bodily injury and property damage liability. The minimum in New York, for example, is $25,000 per person, $50,000 per accident for bodily injury, and $10,000 for property damage.
Ultimately, the amount of liability insurance you need depends on several factors, including the value of your vehicle, your financial situation, and your driving history.
FAQs
Q: What company has the cheapest liability-only car insurance?
A: Rates for liability insurance can vary widely based on factors like location, driving history, credit score, and the type of vehicle. Our analysis shows that Erie, State Farm, Progressive, Auto-Owners, Travelers, and USAA have some of the most competitive rates for this type of coverage.
Q: Is it smart to only have liability insurance?
A: Whether or not to opt for only liability coverage is a personal decision. If your vehicle is worth less than ten times your annual premium, comprehensive and collision coverage might not be financially viable. However, if you plan on keeping your car for several years, liability-only coverage might not be sufficient to cover potential financial risks.
Q: How much does liability-only car insurance cost?
A: The average cost for liability-only auto insurance in July 2023 was around $630 per year, but rates can vary significantly by state and driver.
Q: What is no-fault insurance?
A: No-fault car insurance, also known as personal injury protection (PIP), directly covers your losses, such as medical expenses and lost wages, following an accident, regardless of who was at fault. It is mandated in 12 states.
Why Trust CNBC Select?
CNBC Select is committed to providing high-quality, objective service journalism and consumer advice. Our car insurance reviews are based on rigorous research and data analysis, encompassing over 100 data points across more than a dozen insurance companies. While we receive commissions from affiliate programs, our editorial decisions are independent and unbiased. We emphasize journalistic standards and ethical practices.
Our Methodology
To identify the best liability-only insurance companies, we meticulously analyzed dozens of companies offering minimum coverage. Our comparison process included:
- Minimum coverage premiums: Data from Bankrate was used to calculate minimum coverage premiums for a 40-year-old driver with a clean driving record, good credit, driving a 2022 Toyota Camry 12,000 miles annually.
- Coverage options: We assessed the available coverage options for each company.
- Discounts: We considered the variety and value of discounts offered.
- Availability: We noted the coverage availability within different states.
- Ease of use: We evaluated online tools and mobile apps for customer convenience.
- Customer satisfaction: We incorporated customer satisfaction ratings from J.D. Power and the National Association of Insurance Commissioners (NAIC).
By prioritizing these factors, we’ve compiled a list of the best liability-only car insurance companies, categorized based on their strengths: customer service, families, discounts, driving record, credit, and military service.
Remember: Premiums and insurance policy structures can change based on company policies.
Stay informed and make the right choice for your auto insurance needs!
