What is Liability Car Insurance?

Liability car 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 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 injury and property damage liability.

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

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 car insurance and how much it costs:

• Liability covers damages you cause to other drivers and their property.
• Liability covers attorney's fees if you are sued because of an accident.
• Liability insurance is mandatory in all states except New Hampshire.
• Liability insurance costs vary depending on the level of coverage you choose and the company from which you purchase a policy.
• What other varieties of liability insurance exist?
• How much liability insurance are you required to carry?

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 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

Other uses for liability coverage

Liability coverage can also cover your legal fees if you are sued because of an accident. If you were to lose your case, your liability coverage would be likely to assist in the settlement up to your coverage limits. Any amount beyond your coverage limit must be paid out of pocket.

What doesn't liability cover?

The big omission of liability car 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?

1. 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)
2. 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.
3. 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.
4. 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.

How much does liability cost?

Within any facet of car insurance, how much you pay for liability car insurance will vary. For our average user profile, liability coverage is $406 for a 6-month policy.

Which insurance company has the cheapest liability insurance rates?

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

How much liability insurance do you need?

A good rule of thumb for insurance is you should have as much as you can afford.

Each state has its own mandatory liability auto 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:

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

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.

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 than a per-occurrence policy.

State-by-state minimum liability limits

Explore the table below to learn how much liability insurance you need in your state. Or, use The Zebra to gather quotes and get coverage today.