Liability Car Insurance: 2022 Guide

Car insurance is mandatory for any registered vehicle in most states within the United States. Although the mandatory insurance amount varies from state to state, some mandatory coverages are similar almost everywhere, and one of them is liability car insurance. Liability car insurance is a common form of coverage that protects you financially if you’re held responsible for an accident that resulted in injury, death or damage to property. Liability coverage may also be available if someone is driving your car and causes a collision.

What Is Liability Car Insurance?

Liability car insurance is coverage that helps repair any damage or injury you inflicted to other drivers, their passengers and/or their property or if you hurt a pedestrian. There are two types of liability car insurance required in most states: bodily injury liability coverage and property damage liability coverage. It’s important to check your limits if you have liability-only insurance to ensure enough coverage if an accident happens.

Liability car insurance is mandatory for any registered vehicle in most states within the United States.

What Does Liability Car Insurance Cover?

If you’re found liable for an accident, liability car insurance will cover the medical costs of injured parties along with any associated property damage costs. Policy specifics may vary from provider to provider, but typically most include the following types of coverage:

Bodily injury liability will protect you if you are found liable for someone's medical expenses or if you're sued for having caused harm. It will also cover any loss of income due to injuries sustained from the accident. 

Property damage liability will pay for repairs to someone else's car or for hitting public/private property if you are held responsible for the damage. This can include other cars and property like fences, homes and stores.

Liability Coverage Insurance Limits

All liability car insurance policies have limits, which is the maximum your provider will pay out on a claim. Liability coverage limits are divided into three categories:

  • Bodily injury per person
  • Bodily injury per accident
  • Property damage per accident

When shopping around for a car insurance policy, you may commonly see coverage limits listed as three numbers separated by a slash. For instance, a 25/50/25 liability policy includes:

  • $25,000 in bodily injury coverage per person
  • $50,000 in bodily injury per accident
  • $25,000 in property damage per accident

Your bodily injury liability limit is set per person, for each individual injured in an accident you cause. There's also a bodily injury liability limit per accident, so if several people are injured in an accident there's a limit per person and accident.

Bodily injury liability will protect you if you are found liable for someone's inuries.

With property damage liability you set a maximum amount. If you exceed the limit you've set after being found liable in an accident, you'll have to pay the damages out of pocket. If you raise your liability limits your car insurance rates may go up, but you will save money in the long-run if you are at fault in an accident.

Since anything that goes over these amounts will be your responsibility, you'll want to set high enough liability limits that will cover you if you cause damage or injuries. Each state has minimum coverage liability limits for bodily injury liability and property damage liability. Your insurance company will probably recommend at least $100,000 bodily injury liability coverage per person and $300,000 bodily injury liability coverage per accident. The Insurance Information Institute recommends both of these amounts as well as $100,000 property damage liability coverage.

What Isn’t Covered by Liability Car Insurance?

Liability car policies do not cover the following:

  • Damage to your car
  • Injuries you or your passengers sustain after an accident you caused
  • Expenses that exceed your policy liability limit

To protect yourself financially, you may want to consider additional insurance coverage beyond your state’s minimum liability auto insurance requirements. The minimum liability standards are quite low and would not offer adequate protection in the case of a serious car accident. If you want your insurer to cover these damages and injuries, you’ll need collision and medical coverage. If you’re interested in additional coverage, you may want to consider adding one or more of the following types of insurance to your policy:

  • Personal injury protection insurance: This coverage pays for medical expenses for you and your passengers after a car accident. It may also cover the loss of wages and other related costs.
  • Comprehensive coverage: This pays for repairs or replacement if your car is damaged in a non-collision. This could include hail damage, a falling object hitting the vehicle, vandalism or flood damage.
  • Collision coverage: This covers car repairs if your car is damaged and you’re at fault. It can also cover damages from events like hitting a curb or a tree. Check if your coverage will cover hit-and-runs, rollovers and even pothole damages.  potholes.
  • MedPay coverage: This covers medical expenses for you and your passengers regardless of who is at fault. Medical costs include ambulance rides, ER and doctor visits, and deductibles and copays for health insurance. You’re even covered if you’re hit by a car while riding your bike.
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How Much Does Liability Auto Coverage Cost?

As with most insurance costs, your liability auto coverage costs will vary based on several factors, such as the coverage you choose, your driving record, your location, your age, how often you drive and the value of your car. Also, the higher your coverage limit, the more your liability insurance will likely cost.

The average monthly cost in the United States is $53 monthly. By shopping around, you’ll be able to find liability coverage that fits your budget and needs.

monthly costs for liability only insurance in bar graph

Do I Need Liability Insurance for My Vehicle?

Car liability insurance is mandatory in most states and the District of Columbia. The exceptions are Virginia, with its $500 waiver, and New Hampshire, where drivers must show that they have sufficient funds in case they are responsible for a car accident. Drivers should still check their state’s required limits to ensure they meet the mandatory requirements.

If you exceed the limit you've set after being found liable in an accident, you'll have to pay the damages out of pocket.

How Much Liability Should I Get?

Your liability coverage should meet your needs, it’s not always one-size-fits-all. Drivers may also want to consider additional coverage in case of serious accidents and lawsuits. Remember, you are responsible for any costs that exceed your liability coverage limits. It’s always better to increase your liability car insurance limits above the state’s minimum requirements. Most insurers recommend limits above 50/100/50 to fully protect you.

FAQs

Is liability insurance the same as full coverage?

Liability and full coverage car insurance are different. Full coverage includes liability but also collision and comprehensive. Liability coverage protects you from the other driver's expenses should you cause an accident, while a full coverage policy also covers your own vehicle's damages as well.

Does liability insurance cover my car if someone hits me?

Liability insurance does not cover your car if someone else hits you. In this case, their insurance should cover your damages and injuries. You may want to purchase uninsured/underinsured motorist insurance in case you are hit by a driver who does not have any or sufficient liability insurance.

Is liability car insurance required?

Every state except Virginia and New Hampshire require minimum liability car insurance coverage.

Key Takeaways

  • Each state has minimum insurance requirements, but most states require less coverage than you need to protect yourself and your assets.
  • Liability coverage is broken down into two parts: bodily injury and property damage.
  • You will have to pay out-of-pocket for damages beyond the limits of your policy, which is why you should consider higher liability coverage limits.

Get Cheap Liability Car Insurance Now

Not having sufficient coverage can put you and your family at financial risk. Having a lapse in coverage or canceling your policy could make you a high risk and result in expensive premiums in the future. It may be worth your while to shop around for an affordable insurer to keep your overall costs low. Adding comprehensive and collision insurance, even personal injury protection, to your policy will protect you and your passengers if the worst were to happen. Smart Financial can help you find the right coverage for you and your family, just enter your zip code below and answer a few questions to receive free insurance quotes in your area.

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