What is liability-only auto insurance?

Liability-only auto insurance is a type of car insurance that primarily covers damages and injuries you may cause to other people or their property in an accident. Unlike comprehensive or collision coverage, liability insurance does not pay for your own vehicle's repairs or replacement costs if you are at fault. This coverage is essential for drivers looking to meet minimum legal requirements while keeping insurance costs low.

In most states, liability insurance is a legal requirement for all drivers. The coverage typically comes in two parts: bodily injury liability and property damage liability.
Bodily Injury Liability pays for medical expenses, lost wages, and other costs associated with injuries suffered by other parties in an accident you caused.
Property Damage Liability covers the repair or replacement of another person's property, such as their vehicle or a fence, that you may damage in an accident.

Choosing liability-only auto insurance can be a cost-effective option for specific drivers. For instance, it is often ideal for older vehicles that do not have much resale value, as paying for collision and comprehensive coverage may not make financial sense.
Additionally, younger or less experienced drivers may benefit from this type of insurance as a way to manage their expenses while still complying with state laws.

While the primary focus of liability-only insurance is to safeguard against the financial consequences of causing an accident, it is essential to be aware of its limitations. Without comprehensive or collision coverage, your own vehicle will not be protected in cases of theft, vandalism, or damage from events like storms or animal collisions. Therefore, it's crucial to evaluate your personal situation and vehicle circumstances before opting for liability-only coverage.

In summary, liability-only auto insurance serves as a basic safety net for drivers, protecting them from financial liabilities associated with accidents they cause. It is an affordable option for those who want to fulfill legal requirements without incurring higher insurance costs. However, assessing individual needs and potential risks is vital before making the decision to choose this insurance type.