WalletHub, Financial Company
Liability-only insurance is car insurance that covers a third party's property damage or injuries in the event of an accident. The term “liability-only car insurance” is used to distinguish policies with basic coverage from those with collision insurance and comprehensive coverage.
Liability insurance is the only type of auto insurance that is mandatory in almost every state. It’s split into two main categories of coverage: bodily injury liability and property damage liability.
What Liability-only Insurance Covers
- Medical expenses
- Legal fees
- Loss of income
- Pain and suffering
- Funeral costs
- Repairs to/replacement of cars
- Repairs to/replacement of items in the car during an accident
- Repairs to/replacement of other property, like a mailbox, fence, or house
Liability-only insurance is the least expensive car insurance since it provides such minimal coverage. However, driving with only liability insurance can lead to expensive bills for your own property or injuries, which are not covered by liability-only insurance.
Liability-only car insurance is not always an option, either. Some states require drivers to carry other types of insurance as well, like uninsured or underinsured motorist coverage (UM/UIM) and Personal Injury Protection (PIP). And if your car is leased or financed, your lender will likely require you to purchase collision and comprehensive insurance.
For tips on whether liability-only insurance is enough for your situation, check out WalletHub’s guide on how much car insurance to get.
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