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What is Liability Car Insurance?

Learn more about what goes into the most basic component of car insurance.

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Liability car insurance covers bodily injury and property damage

 

Liability insurance coverage protects other drivers from bodily injury or property damage you might cause in an at-fault accident. It is the most basic form of auto insurance and does not cover you or your vehicle in an accident. It is required by nearly every state in order to legally drive and register your vehicle. 

Liability coverage comprises two key coverages: bodily injuryand property damage liability. 

  • Bodily injury covers the medical bills for which you are responsible in a collision. Bodily injury insurance is allocated on per-person and per-accident bases.
  • Property damage covers the property damage you cause — to a vehicle, structure, bicycle or other property.

 

Useful liability coverage terminology

LimitCoverage description
50/$50,000 in bodily injury liability coverage per person
100/$100,000 in bodily injury coverage per incident
50$50,000 in property damage liability per incident

 

The amount of liability coverage you carry depends on your personal preference and the laws in your state. Because car insurance is regulated at the state level, each state sets minimum policy limits for liability coverage.

In this article, we’ll discuss the basic components of liability insurance and how much it costs:

 

Bodily injury liability coverage

Bodily injury liability is a type of car insurance that covers injuries caused by an at-fault driver. Alongside physical injuries, bodily injury liability covers pain and suffering, loss of income, and other expenses for which you may be deemed liable after a vehicle collision. Bodily injury liability insurance is a mandatory coverage in every state except Florida and New Hampshire and helps to cover:

  • Medical bills caused by injuries
  • Emotional and physical pain or suffering
  • Wages lost or diminished earning capacity caused by accident

 

Property damage liability coverage

Property damage liability coverage pays for damage to another person's property or any loss-of-use costs for which you're found liable. Property damage liability coverage helps to cover expenses like:

  • Vehicle damage and repairs
  • Repair of damaged structures
  • Debris removed as a result of an incident (trees, signage, etc.)

 

How much does liability insurance cost?

Within any facet of car insurance, how much you pay for liability insurance will vary. For a 30-year-old male driving a 2016 Honda Civic with no accidents, the average cost of a 50/100/50 liability policy is $121 per month.

 

Coverage level

Average monthly premium

State Minimum Liability Only

$52

State Minimum with 500 Comp-Coll

$121

50/100/50 BI-PD with 500 Comp-Coll

$129

100/300/100 BI-PD with 500 Comp-Coll

$137

Learn more about the overall average cost of car insurance.

 

Which insurance company has the cheapest liability insurance rates?

Using a methodology outlined here, we compared rates for liability-only auto insurance by coverage levels.

AVERAGE MONTHLY PREMIUM BY LIABILITY COVERAGE LEVEL
Insurance companyState minimum liability50/100/50 BI-PD liability100/300/100 BI-PD liability
Allstate$67$76$84
Farmers$52$60$67
GEICO$40$49$57
Liberty Mutual$53$59$67
Nationwide$59$61$69
Progressive$57$64$73
State Farm$44$52$59
USAA$33$37$42


USAA is the cheapest across the board for liability-only car insurance at all coverage levels. If you do not qualify for USAA, GEICO is the second-cheapest option. Depending on your individual driving profile, your premium could vary. Use our rates as estimates and begin your search for liability insurance with USAA and GEICO.

Although carrying high liability limits costs more, it can save you money in the long run. Not only will exceeding your limits leave you responsible for any additional costs, but a history of low coverage is also considered a risky driving factor by insurance companies. Any time your insurance company views you as a potentially risky client, you can expect a higher premium as a result.

Next, we'll examine how your rate will change if you opt for collision and comprehensive coverage on top of your required liability insurance. The addition of these physical coverages is what makes a policy full coverage. The driver profile used for the following analysis has a $1,000 deductible.

AVERAGE MONTHLY PREMIUM BY LIABILITY COVERAGE LEVEL WITH COMPREHENSIVE AND COLLISION
Insurance companyState minimum liability w/ comp-coll50/100/50 BI-PD liability w/ comp-coll100/300/100 BI-PD liability w/ comp-coll
Allstate$138$147$155
Farmers$112$119$127
GEICO$80$89$97
Liberty Mutual$122$128$134
Nationwide$111$107$114
Progressive$113$120$129
State Farm$90$98$106
USAA$75$80$85

 

USAA and GEICO are the cheapest insurance companies for full coverage insurance.

On average, expect your rate to increase by about 56% if you add comprehensive and collision coverages to your policy. Liability-only policies tend to be the cheapest for a reason — they don't protect you or your vehicle if you're involved in a collision.

Our sample driver profile may not perfectly match your personalized pricing. Compare car insurance rates side-by-side by entering your ZIP code below.

Compare liability insurance rates online today.

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Types of liability insurance

Most large auto insurance companies in America offer a variety of liability insurance coverage options. These commonly include:

  • Commercial auto insurance: For company vehicles, a commercial auto insurance policy may be necessary to cover gaps a personal policy does not cover. Commercial insurance policies offer additional liability coverage for business vehicles such as trucks and transportation vehicles. A commercial auto insurance policy would be useful in a situation where an employee backs into another vehicle on a job site.
  • Business owners policy (BOP): A BOP is similar to a Commercial Auto Insurance policy but offers additional property protections. This policy can help to cover store merchandise or equipment, expenses caused by business interruption, and on-property injury costs. If a hurricane were to destroy your shop, a BOP could help cover the cost of repairs and offer employees some compensation while the business is interrupted. 
  • Professional liability insurance (errors and omissions insurance): This type of policy covers costs stemming from lawsuits for professional errors. These include being sued for negligence or giving bad professional advice.

 

What doesn't liability insurance cover?

The big omission of liability insurance is it does not cover any damage or bodily to you or your vehicle. Physical coverage to your vehicle, aka comprehensive and collision coverage, are separate coverage you can elect to add to your car insurance policy. 

What is not covered by liability insurance?

  • Collision Coverage: If you drive a valuable vehicle, i.e., worth more than $4,000, consider adding this coverage to protect your vehicle from damage by striking a fixed object (such as a wall or another vehicle)
  • Comprehensive Coverage: Usually paired with collision coverage, comprehensive coverage protects your vehicle from incidents not covered by collision coverage. This includes theft, vandalism, or animal damage.
  • Uninsured/Underinsured Motorist Coverage: This coverage protects you and your vehicle from damage done by a driver without insurance — or someone with insufficient insurance. Like liability coverage, it is broken down into property damage and bodily injury coverage options. This coverage can also apply if you're injured by a hit-and-run driver.
  • Personal Injury Protection (PIP): This add-on provides assistance for medical expenses and work-loss coverage after an accident, independent of fault. If you don’t have health insurance, PIP is worth considering. This insurance policy is commonly coupled with no-fault insurance.

 

Other liability insurance considerations

Per-occurrence limit vs. split limit policies

Different policies and companies can structure their liability limits differently. A per-occurrence limit is the most your policy will pay after one occurrence. For example, if you have a per-occurrence limit of $50,000, that is all you will receive after an at-fault accident for the other driver’s bodily injury and property damage.

A split limit policy is more common and is what we described above. You will have separate amounts of coverage for your property damage and bodily injury. Generally, a split limit policy is more recommended that a per occurrence policy.

 

How much liability insurance do you need?

Each state has its own mandatory liability insurance minimums. While we’ve listed the minimum amounts of liability insurance required by state at the end of this section, it's often a good idea to carry more than the minimum. We generally recommend limits above 50/100/50 — especially if you have financial assets. 

Although you might save a few bucks by dropping coverage, it's not recommended to maintain a low level of liability car insurance coverage because:

  • You are responsible for any remaining damage not covered by your insurance
  • You could be perceived as high-risk by insurance companies
 

You’re responsible for damages not covered by your property damage liability coverage:

Because some states have very low property damage liability limits, you end up being responsible for any damage not covered by your insurance. Let's say you’re a California resident who totals another driver's 2019 Ford F150 — listed at $28,155 — in an at-fault accident. In California, mandatory minimum liability car insurance covers $5,000. You would be responsible for the remaining $23,155. Depending on your financial situation, this could be a tricky hole to climb out of without sufficient levels of property damage liability coverage.

 

You appear as a high-risk driver to insurance companies:

Carrying your state’s minimum liability coverage not only leaves you on the hook for any damages leftover from a claim but also stands out as a red flag for insurers. If you elect to carry high liability limits, you shoulder some of the insurance company's financial responsibility and risk. If you carry the bare minimum of property damage and bodily injury liability car insurance, you pass more risk along to the insurer — leading to more expensive premiums, in many cases.

 

6-mo. with state-minimum BI limits

6-mo. with 50/100 BI limits

6-mo. with 100/300 BI limits

$1,568

$1,495

$1,465

 

To avoid higher insurance rates, consider keeping your liability coverage at 100/300/100, if possible, and find out more about how much car insurance coverage you need.

 

State-by-state minimum liability limits

Explore the table below to learn how much liability insurance you need in your state.

 

StateLiability Limit
Alabama25/50/25
Alaska50/100/25
Arizona25/50/15
Arkansas25/50/25
California15/30/5
Colorado25/50/15
Connecticut25/50/25
Delaware25/50/10
Florida—/—/10
Georgia25/50/25
Hawaii20/40/10
Idaho25/50/15
Illinois25/50/20
Indiana25/50/25
Iowa20/40/15
Kansas25/50/25
Kentucky25/50/25
Louisiana15/30/25
Maine50/100/25
Maryland30/60/15
Massachusetts20/40/5
Michigan20/40/10
Minnesota30/60/10
Mississippi25/50/25
Missouri25/50/25
Montana25/50/20
Nebraska25/50/25
Nevada25/50/20
New Hampshire 25/50/25
New Jersey15/30/5
New Mexico25/50/10
New York25/50/10
North Carolina30/60/25
North Dakota25/50/25
Ohio25/50/25
Oklahoma25/50/25
Oregon25/50/20
Pennsylvania15/30/5
Rhode Island25/50/25
South Carolina25/50/25
South Dakota25/50/25
Tennessee25/50/15
Texas30/60/25
Utah25/65/15
Vermont25/50/10
Virginia25/50/20
Washington25/50/10
Washington D.C.25/50/10
West Virginia25/50/25
Wisconsin25/50/10
Wyoming25/50/20

 

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Ava Lynch LinkedIn

Ava worked in the insurance industry as an agent for four-plus years. Currently providing insights and analysis as one of The Zebra’s resident property insurance experts, Ava has been featured in publications such as U.S. News & World Report, GasBuddy, and Yahoo! Finance.

About The Zebra

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