Liability-only auto insurance continues to be one of the most popular coverage options for U.S. drivers in 2025, especially for those who want to stay legal on the road while keeping premiums as low as possible. But while liability insurance is affordable, it also comes with limitations many drivers don’t fully understand.
This expert guide breaks down everything you need to know about liability-only coverage, who it’s best for, how much it costs in different states, and when upgrading to full coverage may be the smarter financial decision.
What Is Liability-Only Car Insurance?
Liability-only insurance covers damages you cause to other people, not your own vehicle.
It includes:
-
Bodily Injury Liability (BI)
-
Property Damage Liability (PD)
If you’re at fault in an accident, liability coverage pays for:
-
Medical expenses for the other party
-
Vehicle repairs for the other party
-
Legal fees (including lawsuits)
But it does NOT cover:
-
Damage to your own car
-
Your medical bills
-
Theft, vandalism, weather damage, or hit-and-runs
Who Should Choose Liability-Only Insurance in 2025?
Liability-only coverage is ideal for:
✔ Drivers with older cars (10+ years old)
If your vehicle’s value is lower than $4,000–$5,000, paying for full coverage rarely makes financial sense.
✔ Drivers who need the cheapest possible monthly premium
Liability-only is often 40–60% cheaper than full coverage in most states.
✔ Drivers without a loan or lease
Financing companies require full coverage.
Paid-off vehicles give you flexibility.
✔ Safe drivers with a clean record
If your accident risk is low, you may save significantly.
Average 2025 Liability-Only Insurance Costs (State Comparison)
(Estimated nationwide averages)
| State | Monthly Average | Notes |
|---|---|---|
| Florida | $118 | High claim frequency + higher fraud rates |
| California | $102 | Large population + strict insurance rules |
| Texas | $95 | Fast-growing premiums due to accident rates |
| New York | $130 | Densely populated + expensive claims |
| Ohio | $68 | One of the cheapest states for car insurance |
| Illinois | $74 | Below the national average |
| Georgia | $109 | Rates rose nearly 20% from 2023–2024 |
Is Liability-Only Worth It in 2025?
Liability-only is worth it if your priority is the lowest cost possible and you drive a car with low market value.
It is not recommended if:
-
Your car is newer than 2016
-
You live in a high-theft or coastal weather-risk area
-
You want protection from uninsured drivers
-
You can’t afford to replace your car out of pocket
When Should You Upgrade to Full Coverage?
Choose full coverage when:
-
Your vehicle is worth more than $6,000
-
You live in a city with high theft rates
-
You can’t afford unexpected repair bills
-
You drive long distances regularly
-
Your state requires uninsured motorist coverage (UM/UIM), and you want complete protection
Final Verdict: Liability vs. Full Coverage in 2025
Liability-only insurance is a great budget-friendly option for millions of U.S. drivers. But it’s not one-size-fits-all.
If your car is older and paid off → Liability-only makes sense.
If your car is newer or you want peace of mind → Choose full coverage.