Learning How to Purchase Liability Car Insurance

Lower your liability car insurance rates by (1) reporting accurate information to your insurer, (2) searching for hidden discounts, and (3) keeping a clean driving record.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 15, 2021

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Here's what you need to know...

  • First, you need to know what the requirements for insurance are in your state
  • If you have a loan on or are leasing your vehicle, you will need more than just liability coverage
  • You can shop around for quotes on liability-only coverage the same way you would for any other coverage

Consumers can purchase liability car insurance in the same exact manner that they would purchase any other type of policy. Car insurance can be purchased online, over the phone, or in person with an auto insurance agent.

See your car insurance quotes by entering your ZIP code!

Some states allow motorists to purchase liability-only car insurance if they meet the right criteria. However, there are also states that require drivers to carry additional coverage at all times.

You need to find out about the laws in your state in order to see if you can purchase a liability car insurance policy.

How to Find Out if You Can Get a Liability-Only Car Insurance Policy

By visiting your local DMV, you can find out about the rules of the road as well as what type of car insurance policy you need.

The Department of Motor Vehicles will have pamphlets, brochures, and other materials that will explain the state minimum amount of car insurance that is required.

Another way to find out if you can purchase liability-only car insurance coverage is by speaking to local insurance providers.

By making a few phone calls, you can get the information that you need about liability auto insurance and confirm that you are getting the right answers.

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When the State Minimum for Car Insurance Is Not Enough

If you have a vehicle that is being financed, the contract that you signed with the bank will supersede state law. Motorists that are paying for their vehicles need comprehensive coverage in most cases.

If you elect to purchase a liability policy, your car finance company will take out an additional policy and tack the bill onto the back of your loan.

For motorists that have had their licenses suspended, many car insurance companies will require them to carry full coverage until they can show that they have become more responsible. This only happens in extreme cases, such as drunk driving violations.

The Steps Needed to Purchase a Liability Policy

Before you can purchase a liability-only auto insurance policy, you will need to select an insurance provider. If you have a specific company in mind, you can speak to a representative and fill out a few forms, and your policy will be active immediately.

For consumers that don’t have a preferred car insurance company, getting online quotes will be helpful.

A down payment is necessary before you can purchase a liability car insurance policy. You will need to decide if you want to pay for the entire policy up front, or if you want to make quarterly or monthly payments.

Your car insurance agent will need you to supply information about the car that you want to be insured, and then you will be given your insurance cards.

What Liability Car Insurance Covers

Unlike comprehensive auto coverage, liability coverage protects everyone and everything, with the exception of the insured driver. In other words, if you get into an accident you will not need to worry about paying the medical bills of the other driver and passengers.

The other party will also be able to get their car repaired free of charge. Some liability auto insurance policies also cover property damage, so if you were to hit a house you would not have to pay to have it repaired.

Your liability-only car insurance policy will have a cap. This means that all expenses will be covered up to $10,000, $25,000, or whatever amount you selected.

Although liability-only coverage will keep you from having to pay for the damage caused to other vehicles, you will still be responsible for making your own repairs. Drivers with older vehicles usually get liability-only coverage because their cars are not worth much money.

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How to Get a Fair Price on Liability Auto Insurance Coverage

Traditionally, liability car insurance policyholders pay the lowest premiums. Simply by opting to get the minimum amount of coverage, your rates will be much more affordable.

However, drivers that have several points on their license and motorists that have let their policies lapse in the past might end up paying a higher price. It is best to compare car insurance rates at several different companies before making a selection.

The following can help you get a better insurance rate:

  • Inquiring about group rate discounts
  • paying your premiums in full
  • avoiding getting into collisions

If you choose a high-deductible liability car insurance policy, you might be able to save even more money.

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