Cheapest Liability-Only Car Insurance for Older Cars: When Minimal Coverage Makes Sense

Introduction – The Case for Liability-Only Coverage

Because the market value of automobiles continuously decreases with increasing age, the basis for carrying expensive insurance policies also decreases. A significant number of motorists continue to pay for accidents and comprehensive coverage even after the value of their vehicles has decreased to a few thousand dollars, or even less in some cases. In such situations, liability-only car insurance often makes more financial sense, providing legal protection without the high full coverage premiums.  In situations like this, the rates for full coverage may be higher than the vehicle’s value.

Now, purchasing auto insurance that covers solely liability becomes a prudent financial option. Drivers can significantly lower their premiums by eliminating unnecessary protections. This can result in savings of anywhere from $500 to $1,200 annually, depending on the state and the insurance.

Regarding older automobiles, liability-only coverage strikes a balance between complying with state insurance rules and avoiding overpaying for coverage that does not provide any substantial benefit. If you take the appropriate approach, you can safeguard your financial situation, maintain your legal standing, and prevent yourself from spending money on an insurance policy greater than your vehicle’s value.

What Is Liability-Only Car Insurance?

Liability-only car insurance is the most basic type of auto coverage required by law in nearly every U.S. state. Instead of protecting your vehicle, it focuses on covering damages and injuries you cause to others in an accident.

Key elements of liability coverage include:

• Bodily Injury Liability (BIL): Pays for medical expenses, lost wages, and legal costs if you injure someone in an at-fault accident.
• Property Damage Liability (PDL): This covers repairs or replacements if you damage another person’s car or property.

Each state sets its own minimum liability requirements, typically expressed in numbers like 25/50/25, meaning:

• $25,000 for bodily injury per person.
• $50,000 for bodily injury per accident.
• $25,000 for property damage.

Unlike full coverage insurance, liability-only policies exclude:

• Repairs to your own car.
• Coverage for theft, fire, vandalism, or natural disasters.
• Medical bills for you or your passengers (unless paired with medical payments coverage or PIP).

This makes liability-only the leanest—often cheapest—way to stay insured.

When Does Liability-Only Insurance Make Sense?

Liability-only insurance is not the right fit for everyone, but it’s the most cost-effective choice for many drivers of older cars. Situations where it makes sense include:

• If the car’s market value is low, when your car is only worth a few thousand dollars (or less), paying $600–$1,000 annually for collision/comprehensive coverage is wasteful. If your car were totaled, the payout wouldn’t justify the premiums.
• When repair/replacement costs exceed the car’s worth—If a single accident could lead to repair costs greater than the car’s resale value, liability-only coverage ensures you don’t spend money on unnecessary coverage.
• Drivers with financial discipline and emergency savings – If you can afford to replace or repair your old car out of pocket, you may not need the safety net of full coverage.
• Cars used for short commutes or as secondary vehicles – Liability-only is practical when a vehicle isn’t essential for daily life or has limited usage. For example, a family with a primary car may keep liability-only on their second, older car.

Liability-only makes financial sense if your car’s premium + deductible > car’s actual cash value (ACV).

Pros and Cons of Liability-Only Coverage

Like any insurance decision, choosing liability-only comes with both advantages and drawbacks.

Advantages

• Lower monthly premiums: You can cut your insurance bill by half or more by eliminating collision and comprehensive coverage.
• Meets legal requirements affordably: Liability-only ensures you stay compliant with state insurance laws without overspending.
• Frees up budget for other needs: Money saved on premiums can be redirected toward emergency savings, car maintenance, or even replacing the car when needed.

Disadvantages

• No coverage for your car’s damage: If you’re at fault in an accident, you’ll have to pay out-of-pocket for your repairs or replacement.
• Higher out-of-pocket risk: Theft, natural disasters, or hit-and-run damages are not covered.
• Limited peace of mind compared to full coverage: Some drivers feel more secure knowing their car is fully protected, regardless of age or value.

The choice ultimately depends on balancing cost savings vs. risk exposure.

How Much Does Liability-Only Insurance Cost for Older Cars?

The cost of liability-only insurance varies depending on state laws, driving history, and personal risk factors. On average, drivers pay $500–$900 annually for liability-only coverage, compared to $1,500+ for full coverage.

Factors That Influence Cost

• Driving History: A clean record with no at-fault accidents or violations can secure the lowest rates. DUIs, speeding tickets, or prior claims increase premiums.
• Location: States like Michigan, Florida, and New York tend to have higher liability premiums due to stricter laws and higher accident rates, while states like Iowa or Maine are cheaper.
• Vehicle Type: Since liability risk is lower, insuring an older compact sedan (like a Honda Civic) costs less than insuring an older SUV or truck.
• Coverage Limits: Higher liability limits increase costs but provide more financial protection.

Example Scenarios

• 2008 Honda Civic in Ohio – Liability-only coverage might cost around $420/year, compared to $1,200 for full coverage.
• 2010 Ford Explorer in Florida – Liability-only might run $850/year, while full coverage could exceed $2,000.

These examples highlight why older cars are often best suited for liability-only insurance—it ensures compliance without overspending.

How to Find the Cheapest Liability-Only Car Insurance

Compare Multiple Providers

Insurance companies weigh risk differently, meaning one insurer may quote $500 annually while another quotes $850 for the same driver. Shopping around is the most effective way to find the cheapest liability-only coverage.

Leverage Discounts

Even on liability-only policies, you may qualify for discounts:

• Safe driver discounts.
• Multi-car or bundling with home/renters insurance.
• Usage-based or telematics programs that reward good driving.
• Paying premiums annually instead of monthly.

Use Platforms Like Beem

Rather than collecting quotes manually, Beem simplifies the process by allowing drivers to instantly compare liability-only quotes across multiple insurers. In just minutes, you can identify which provider offers the cheapest coverage in your state.

Check your cheapest liability-only quotes with Beem today.

Alternatives to Liability-Only Insurance for Older Cars

While liability-only is the cheapest option, it isn’t always the only solution. Drivers may also consider:

• Usage-based or pay-per-mile insurance: Ideal if you rarely drive your older car but want more protection than liability-only.
• Non-owner policies: A smart option if you no longer own a car but occasionally drive rentals or borrowed vehicles.
• Minimum coverage plus add-ons: Adding uninsured/underinsured motorist coverage can protect you financially if hit by an uninsured driver—common in many states.

These alternatives ensure flexibility while balancing cost and protection.

Conclusion – Making the Smart Choice

Liability-only insurance can be the most cost-effective and prudent approach to complying with the law for older vehicles without overpaying for coverage you will never actually use. It maintains affordable rates, frees up your budget, and ensures that you follow the state’s regulations.

In exchange, you will be exposed to a greater risk and will not be paid for any losses to your vehicle. As a result, the worth of your vehicle determines the decision, the degree of financial comfort you can maintain, and the amount of peace of mind you desire.

Finding the best rates for liability-only coverage is simple and quick when you use resources such as the insurance comparison portal Beem offers. By comparing multiple providers side by side, you can confidently acquire the appropriate coverage for your older vehicle at the most affordable price feasible.

Are you prepared to save? Use Beem app to compare quotes for liability-only coverage and determine how much you can save on your auto insurance premiums.

FAQs – Liability-Only Insurance for Older Cars