What Is Liability Car Insurance?

Required by law in nearly every state, liability car insurance is a type of auto coverage that can take care of another person's medical expenses or repairs after an accident you caused. As a result, it acts as a safety net that prevents you from bearing the full financial responsibility after a costly accident.

Read below to learn how liability car insurance works, what situations it covers, how much coverage you may need and what it typically costs.

On This Page

• 

  How Does Liability Car Insurance Work?

• 

  Is Liability Car Insurance Required by Law?

• 

  What Does Liability Car Insurance Cover?

• 

  How Much Does Liability Car Insurance Cost?

• 

  How Much Liability Car Insurance Do I Need?

• 

  How To Get Liability Car Insurance

• 

  FAQs

How Does Liability Car Insurance Work?

Liability car insurance covers injuries you cause to another person and damage you cause to their property in an at-fault accident, with the other party filing a claim against your insurance policy. It may also cover associated legal fees if you’re sued after an accident.

Keep in mind that liability insurance only covers damage and injuries you cause to others — it does not cover your own injuries or vehicle repairs. Liability coverage only pays up to your policy limits. If the damage exceeds those limits, you may be responsible for paying the difference out of pocket. We’ll cover more on liability limits later.

To maintain liability car insurance, you must pay your premium monthly, semiannually or annually, depending on your policy.^[1]

Does Liability Coverage Have a Deductible?

Unlike many other forms of car insurance, liability coverage isn’t subject to a deductible.^[2] That means if you get into an accident that injures someone or causes damage to their vehicle or personal property, your insurance will pay for the costs — up to your policy limits — without requiring you to pay out of pocket first.

Is Liability Car Insurance Required by Law?

Some form of liability insurance is required by law in the District of Columbia and every state except New Hampshire, which instead requires uninsured drivers to prove they can cover accident costs to meet the state’s financial responsibility requirement.^[3] Of those states requiring liability insurance, only Florida does not require drivers to carry bodily injury liability coverage.^[4]

What Does Liability Car Insurance Cover?

Liability car insurance includes two types of coverage: bodily injury liability and property damage liability.

What Isn't Covered?

Liability car insurance coverage does not cover medical expenses for you or your passengers, nor does it pay for repairs to your vehicle. However, you can often purchase other types of coverage to help pay for these expenses.

Below are some situations not covered by liability insurance and the types of car insurance that would apply instead.

How Much Does Liability Car Insurance Cost?

The average annual cost of a liability-only car insurance policy was $661.64 as of 2022.^[6] However, rates vary by driver and insurer, depending on several personal and geographic factors.

Factors that can influence the cost of your liability insurance include:

• Age: Inexperienced teenage drivers typically pay higher rates than middle-aged drivers because they are statistically more likely to cause a car accident.
• Gender: In some states, men may pay higher rates than women because they are more prone to costly accidents.^[7] However, insurers are not allowed to consider gender when setting rates in California, Hawaii, Massachusetts, Michigan, Montana, North Carolina or Pennsylvania.^[8]
• State: Liability rates vary by location. For example, in 2022, the average liability premium in Florida was $1,152.02, compared to $308.02 in North Dakota.^[6]
• Driving and claims history: Drivers with multiple accidents or past claims are considered higher risk and typically pay more than drivers with clean records.
• Coverage limits: Lower limits mean less protection but a lower premium. Keep in mind that you can’t reduce your limits below your state’s minimum requirements.
• Number of drivers: Policies that cover multiple drivers generally cost more than those that cover one driver, though many insurers offer discounts on multi-car policies.
• Location: Urban drivers tend to pay higher rates than rural drivers because of increased accident risk from traffic and pedestrian activity.

How Much Liability Car Insurance Do I Need?

Every state sets its own requirements for the type and amount of liability car insurance you must carry. Most states use an A/B/C format to express minimum liability requirements. This refers to:

• A: The maximum amount your policy pays for bodily injury per person
• B: The maximum your policy pays for total bodily injury per accident
• C: The maximum your policy pays for property damage per accident

Some states, however, allow a combined single limit that applies to all liability-related expenses from one accident. Below is an overview of the minimum liability coverage requirements for each state and the District of Columbia.^[5]

Consider purchasing a policy with higher liability limits than your state’s minimum requirements. For example, if your policy provides $25,000 in property damage liability and you total someone’s $50,000 car, you would be responsible for paying the $25,000 difference out of pocket.

Many insurance companies recommend choosing coverage limits of 100/300/100.^[9]

How To Get Liability Car Insurance

Because each insurance company may use different underwriting methods and offer varying discounts, it’s a good idea to compare quotes from at least three to five insurers. To estimate your rate, insurers will likely ask for information such as your car’s value, your driving history and other personal details used to calculate premiums.

Gathering individual quotes can be time-consuming, since you’ll often need to contact each insurer separately. You can speed up the process by using an insurance marketplace like SmartFinancial. After you complete a brief questionnaire, we’ll connect you with a licensed insurance agent who can help you find the coverage you need. Click here for a free auto insurance quote today!