Auto Liability Only.

Auto Liability Only.

Liability-only car insurance may satisfy state requirements and save you money, but it isn’t right for everyone.

Car insurance can be expensive, especially if you pay for insurance you might not need or can’t easily afford. In special circumstances, it makes sense to just stick with liability-only car insurance — if your state allows you to.

Liability-only car insurance pays for injuries or property damage you cause others while behind the wheel. It won’t pay for your own medical bills or injuries to immediate family members in the car, or for damage to your own car after an accident you cause.

Liability-only car insurance is sometimes called “minimum coverage,” but they aren’t quite the same thing. While many states allow you to purchase liability-only insurance, most states require additional coverage types to legally drive.

What does liability-only car insurance cover?

“Liability” is just another word for responsibility — and when it comes to insurance, that means your financial responsibility to others. If you cause an accident while driving, you’re legally responsible for paying medical bills, lost wages and more for injured drivers, their passengers, and nearby pedestrians. You’d also be on the hook to pay for any property you bang up, like other people’s cars or a guard rail.

Without liability coverage, you’re left footing these bills yourself, which most people would have a hard time affording. That’s why every state requires at least some liability coverage (with the exception of Virginia and rural parts of Alaska) — or proof you have enough cash on the side to pay for such worst-case scenarios.

Liability-only auto insurance is broken down into two parts: 

• Bodily injury liability. This pays for injuries you cause others in a wreck, except your immediate household family members.
• Property damage liability. This pays for any destruction you cause to someone else’s property, such as vehicles, fences, buildings and government-owned property.

1Article written by Ryan Brady at NerdWallet, unless otherwise noted.