If you want the lowest inexpensive car insurance possible that will keep you legal while you drive, than what you really want is car liability insurance. Most states only require liability insurance; therefore, if you want to reduce your premiums as low as they can go, this is all you need. However, you only qualify for liability insurance if you own your car, since liability will only cover the damage that the other car sustains if you are at fault for the accident, not your own car. Therefore, you cannot have a loan on your car if you want liability since you have to be able to repair the car’s full value.