Is basic car insurance coverage a smart choice?

Purchasing only a basic car insurance plan will save you money, but is it enough coverage to protect you? Read on to examine the pros and cons of basic car insurance, also known as liability coverage.

UPDATED: Jul 4, 2024Fact Checked

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Written by:

Daniel Walker

Licensed Insurance Agent

Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...

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Written by Daniel Walker

Licensed Insurance Agent

Reviewed by:

Zach Fagiano

Insurance & Finance Analyst

Zach Fagiano has been in the insurance industry for over 10 years, specializing in property and casualty and risk management consulting. He started out specializing in small businesses and moved up to large commercial real estate risks. During that time, he acquired property & casualty, life & health, and surplus lines brokers licenses. He’s now the Senior Vice President overseeing globa...

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Reviewed by Zach Fagiano

Insurance & Finance Analyst

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UPDATED: Jul 4, 2024

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UPDATED: Jul 4, 2024

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

What are the benefits of a basic car insurance policy?

Basic auto insurance — also known as liability car insurance coverage — pays for repairs if you injure someone or damage another person’s car in an accident.

The main benefit of liability coverage is that it is relatively inexpensive. While the amount you pay for basic car insurance varies based on several factors, you can bet you’ll pay less for a liability-only policy than a policy with more coverage, like collision insurance or GAP insurance.

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What are the drawbacks of a basic car insurance policy?

The most crucial drawback of having a basic auto insurance policy is the lack of coverage. While your insurance will help cover damage you cause to other people and their vehicles, basic insurance won’t pay for damage to your car.

Other cons of a switching to liability-only car insurance include:

Bodily injuries to you and your passengers may not be covered if the accident is considered your fault.
You will not have coverage for non-accident-related damages, such as damage from a storm or debris.
If the other driver was uninsured or underinsured, you could have to make payments even if the accident was their fault.

While a basic auto insurance policy can be tempting, it’s essential to consider purchasing more than your state’s minimum requirement for auto insurance coverage.

How much insurance do I have to carry on my vehicle?

The laws for basic car insurance coverage vary by state. The table below shows the minimum car insurance required by each state.

Basic Car Insurance Requirements by State

State	Insurance Type Required	Minimum Coverage Amount
Alabama	Bodily injuries/death of one person	$25,000
	Bodily injuries/death of multiple people	$50,000
	Property damage	$25,000
Alaska	Bodily injury liability	$50,000 per person $100,000 per accident
	Property damage liability	$25,000 minimum
Arizona	Bodily injury liability	Minimum $15,000 per person and $30,000 per accident
	Property damage liability	Minimum $10,000
	Uninsured motorist and bodily injury	Minimum $15,000 per person and $30,000 per accident
	Uninsured motorist and property damage	Minimum $10,000
Arkansas	Bodily injury	$25,000 per person /$50,000 per accident
	Property damage liability	$25,000 per accident
California	Bodily injury or death of one person in an accident caused by the insured vehicle's owner	$15,000
	Total bodily injury or death in an accident caused by the insured vehicle's owner	$30,000
	Property damage per accident caused by the owner of the insured vehicle	$5,000
Colorado	Death or injury of one person	$25,000
	Death or injury of more than one person	$50,000
	Property damage liability	$15,000
Connecticut	Bodily injury or death of one person in an accident caused by the insured vehicle's owner	$25,000
	Total bodily injury or death in an accident caused by the insured vehicle's owner	$50,000
	Property damage per accident caused by the insured vehicle's owner	$25,000
Delaware	Personal injury protection	$15,000 per person $30,000 per occurrence $5,000 in funeral services coverage
	Bodily injury or death of one person in an accident caused by the insured vehicle's owner	$25,000
	Total bodily injury or death in an accident caused by the insured vehicle's owner	$50,000
	Property damage per accident caused by the insured vehicle's owner	$10,000
Florida	Personal injury protection	$10,000
	Property damage liability	$10,000
Georgia	Bodily injury liability	$25,000 per person and $50,000 per accident
	Property damage liability	$25,000 per accident
	Uninsured motorist and bodily injury	$25,000 per person and $50,000 per accident
	Uninsured motorist and property damage	$25,000 with a $250, $500, or $1,000 deductible
Hawaii	Bodily injury liability	$20,000 per person $40,000 per accident
	Property damage liability	$10,000 minimum
	Personal injury protection/"No-fault" coverage	$10,000 minimum
Idaho	Bodily injury or death per person resulting from an accident you cause	$25,000
	Total bodily injury or death liability resulting from an accident you cause	$50,000
	Property damage per accident resulting from a collision you cause	$15,000
Illinois	Bodily injuries/death of one person	$25,000
	Bodily injuries/death of multiple people	$50,000
	Property damage	$20,000
Indiana	Bodily injury liability	$25,000 per person $50,000 per accident
	Uninsured motorist	$25,000 per person $50,000 per accident
	Property damage liability	$25,000 minimum
	Underinsured motorist	$50,000 minimum
Iowa	Injuries of one person	$20,000
	Injuries of more than one person	$40,000
	Property damage liability	$15,000
Kansas	Injury or death per person in an accident you cause	$25,000
	Total injuries or the death per accident the insured you cause	$50,000
	Property damage in an accident caused by the insured driver	$25,000
	Uninsured/underinsured motorist	$25,000 per person $50,000 per accident
Kentucky	Bodily injury liability for one person	$25,000
	Bodily injury liability total for an accident	$50,000
	Property damage liability	$25,000
	Personal injury protection	$10,000
Louisiana	Injury/death per person	$15,000
	Injuries or death per accident	$30,000
	Property damage per accident	$25,000
Maine	Death or injury per person	$50,000
	Total death or injury per accident	$100,000
	Property damage per accident	$25,000
	Uninsured/underinsured motorist	N/A
	MedPay	N/A
Maryland	Bodily injury liability of one person	$30,000
	Bodily injury liability two or more people	$60,000
	Property damage liability	$15,000
Massachusetts	Bodily injury liability	$20,000 per one person $40,000 total per accident
	Property damage liability	$5,000 per accident
	No-fault personal injury	$8,000
	Uninsured motorist	$20,000 per one person $40,000 per accident
Michigan	Personal injury protection	$50,000 (for drivers enrolled in Medicaid) $250,000 all others
	Personal property protection	$1 million
	Bodily injury liability	$50,000 per person $100,000 per incident
	Property damage liability	$10,000 per incident
Minnesota	Personal injury protection	$40,000 per person per accident. ($20,000 for medical expenses and $20,000 for non-medical expenses)
	Bodily injury liability	$30,000 per person $60,000 for two or more people (per incident)
	Property damage liability	$10,000
	Uninsured motorist Bodily injury	$25,000 per person $50,000 for two or more people (per incident)
	Underinsured motorist Bodily injury	$25,000 per person $50,000 for two or more people (per incident)
Mississippi	Bodily injury per person	$20,000
	Total bodily injury per accident	$40,000
	Property damage per accident	$10,000
Missouri	Injury or death per person in an accident you cause	$25,000
	Total injuries or death per accident you cause	$50,000
	Property damage per accident you cause	$10,000
	Uninsured motorist	$25,000 in bodily injury per person $50,000 in bodily injury per accident
Montana	Injury or death of one person in an accident you cause	$25,000
	Total injuries or death of more than one person in an accident you cause	$50,000
	Property damage in an accident you cause	$20,000
Nebraska	Injury or death per person in an accident you cause	$25,000
	Total injuries or death per accident you cause	$50,000
	Property damage per accident you cause	$25,000
	Uninsured/underinsured motorist	$25,000 to cover your own injury per person $50,000 to cover total injuries or death per accident
Nevada	Bodily injury or death of any individual resulting from an accident the vehicle owner/driver causes	$25,000 per person
	Total bodily injury or death liability resulting from an accident the vehicle owner/driver causes	$50,000 per accident
	Total property damage resulting from an accident the vehicle owner/driver causes	$20,000 per accident
New Hampshire (Drivers aren't technically required to carry insurance)	Bodily injury or death of one person in an accident caused by the insured vehicle's owner	$25,000
	Total bodily injury or death in an accident caused by the owner of the insured vehicle	$50,000
	Property damage per accident caused by the owner of the insured vehicle	$25,000
	MedPay	$1,000 to cover medical expenses after a crash
	Uninsured/underinsured motorist	Same coverage amount as liability
New Jersey	Bodily injury	None required, but optional starting at a minimum of $10,000 per person and $10,000 per accident
	Property damage liability	$5,000
	Personal injury protection	$15,000 per person, per accident Up to $250,000 for brain and spinal cord injuries
New Mexico	Injuries to one person in an accident	$25,000
	Injuries to all people in an accident	$50,000
	Property damages caused by an accident	$10,000
New York	Personal injury liability	$25,000 per person with a maximum of $50,000 per accident
	Liability coverage for death	$50,000 per person with a maximum of $100,000 per accident
	Property damage liability	$10,000 per accident
	Personal injury protection	$50,000 per person
	Uninsured motorists	$25,000 per person with a maximum of $50,000 per accident
North Carolina	Injuries to one person	$30,000
	Injuries to more than one person	$60,000
	Property damage liability	$25,000
North Dakota	Bodily injury liability	$25,000 per person $50,000 per accident
	Property damage liability	$25,000
Ohio	Bodily injury liability	$25,000 per person $50,000 per incident
	Property damage liability	$25,000
Oklahoma	Injury or death of one person	$25,000
	Injury or death of more than one person	$50,000
	Damage to personal property	$25,000
Oregon	Injuries of one person	$25,000
	Injuries of more than one person	$50,000
	Property damages	$20,000
	Personal injury protection (also known as Medical Payments/MedPay)	$15,000
	Uninsured motor	$25,000 per person and $50,000 per total accident
Pennsylvania	Medical benefits coverage (also known as first-party benefits), a form of personal injury protection, to cover medical expenses for yourself or others, regardless of fault	$5,000
	Liability insurance to cover medical costs for injuries to one person, capped at $30,000 per accident	$15,000
	Property damage if you’re at fault	$5,000
Rhode Island	Bodily injury coverage to cover the injuries of one person	$25,000
	Injuries of more than one person	$50,000
	Property damaged in a car accident	$25,000
	Uninsured/underinsured motorist	$25,000
South Carolina	Bodily injury or death of one person in an accident caused by the insured vehicle's owner or driver	$25,000
	Total bodily injury or death liability in an accident caused by the insured vehicle's owner or driver	$50,000
	Property damage per accident caused by the insured vehicle's owner or driver	$25,000
South Dakota	Bodily injury liability coverage per person to cover the costs associated with the injury or death of an individual resulting from an accident you cause	$25,000
	Bodily injury liability coverage per accident to cover the costs associated with the total bodily injury or death liability resulting from an accident you cause	$50,000
	Property damage liability coverage to cover the costs associated with property damages incurred by another individual or individuals resulting from an accident you cause	$25,000
	Uninsured/underinsured motorist	Same coverage amount as liability
Tennessee	Bodily injury or death of an individual resulting from an accident you cause	$25,000
	Total bodily injury or death liability resulting from an accident you cause	$50,000
	Property damage liability coverage to cover the total costs of another party or party’s property damage resulting from an accident you cause	$15,000
Texas	Bodily injury liability	$30,000 per person $60,000 per accident
	Property damage liability	$25,000
Utah	Injury or death to any one person in an accident	$26,000
	Injury or death to two or more people in an accident	$65,000
	Damage to property in an accident	$15,000
	Personal injury protection coverage per person	$3,000
Vermont	Death or injury of one person	$25,000
	Death or injury of more than one person	$50,000
	Property damage liability	$10,000
Virgina	Death or injury of one person	$25,000
	Death or injury of more than one person	$50,000
	Property damage liability	$20,000
Washington	Bodily injury liability	$25,000 per one person $50,000 total per accident
	Property damage liability	$10,000 per accident
West Virgina	Bodily injury or death of one person in an accident caused by the insured vehicle's owner	$25,000
	Total bodily injury or death in an accident caused by the insured vehicle's owner	$50,000
	Property damage per accident caused by the insured vehicle's owner	$20,000
Wisconsin	Bodily injury or death of one person in an accident caused by the insured vehicle's owner	$25,000
	Total bodily injury or death in an accident caused by the insured vehicle's owner	$50,000
	Property damage per accident caused by the insured vehicle's owner	$10,000
	Injury to one person for both uninsured/underinsured motorists	$25,000
	Injury to more than one person for both uninsured/underinsured motorists	$50,000
Wyoming	Bodily injuries/death of one person	$25,000
	Bodily injuries/death of multiple people	$50,000
	Property damage	$20,000

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As you can see, most states have requirements for bodily injury and property damage coverage. Some states also include additional requirements for uninsured/underinsured motorists, personal injury protection, and medical payments.

Should I get a basic car insurance policy?

If you’ve paid off your vehicle and don’t have to carry full coverage to meet a lender’s requirement, you can get away with a basic auto insurance policy.

Before you decide to go with a basic policy, consider how much you could pay out of pocket if you were to cause an accident.

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What additional insurance coverage should I consider?

For adequate protection on the road, you may want to consider the following auto insurance coverage options:

Collision car insurance
Comprehensive car insurance
Uninsured/underinsured motorist coverage
Medical payments
Personal injury protection (PIP) coverage
GAP insurance
Roadside assistance

There is also a difference in the average car insurance rates by age and gender as well as car type and many other factors.

Case Studies: Pros and Cons of Basic Car Insurance Coverage

Case Study 1: Sarah’s Experience With Basic Car Insurance

Sarah, a young driver with a limited budget, opted for a basic car insurance policy to save money. While the policy provided her with the necessary liability coverage, it didn’t protect her own vehicle. Unfortunately, Sarah got into an accident, resulting in significant damage to her car. Without comprehensive or collision coverage, she had to bear the repair costs on her own.

Case Study 2: Mark’s Decision to Upgrade from Basic Coverage

Mark, an experienced driver, initially had a basic car insurance policy. However, after researching the potential risks and assessing his financial situation, he decided to upgrade to a policy that offered comprehensive and collision coverage. This additional coverage gave him peace of mind knowing that his car would be protected in various scenarios, including accidents, theft, and natural disasters.

Case Study 3: Maria’s Cost-Effective Approach

Maria, a frugal driver, carefully evaluated her options and decided that a basic car insurance policy suited her needs. She drove an older vehicle with a low market value and had sufficient savings to cover any potential repairs or damages. By choosing a basic policy, Maria saved money on premiums while still meeting the legal requirements for auto insurance.

Basic Car Insurance: The Bottom Line

If it’s all you can afford, there is nothing wrong with only purchasing a basic auto insurance policy. This insurance type is all you need to drive legally, and it will help cover damage to other people and their vehicles if you cause an accident.

However, if you can afford additional auto insurance coverage, consider adding comprehensive and collision coverage to your policy. In addition, you may want to add other coverages depending on your specific needs.

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Frequently Asked Questions

What is basic car insurance coverage?

Basic car insurance coverage typically refers to the minimum legal requirement for car insurance in a particular jurisdiction. It generally includes liability coverage, which pays for the damages you cause to others in an accident, and may also include personal injury protection (PIP) or medical payments coverage.