What is Liability Car Insurance?
Liability car insurance coverage pays for property and bodily damage you cause others in an accident. Most states require drivers to carry at least a minimum amount of coverage.
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Only one state — New Hampshire — allows you to forgo buying car insurance, provided you can prove you have enough money to pay in the event of an auto accident. If you live anywhere else, state law will require you to buy liability insurance coverage that meets or exceeds the state's minimum requirements.
Also known as standard insurance, liability insurance pays for costs related to the bodily injury and property damage of the other driver after an accident you caused.
Liability insurance is an excellent option for affordable coverage, but it’s important to know how far that coverage will extend while also considering what’s best for your personal situation. Many drivers feel the need to purchase additional comprehensive or collision coverage for a greater level of financial protection.
Quick Facts
Most states require drivers to carry a minimum amount of liability car insurance.
State minimum coverage might not be enough to cover all your costs in case you cause an accident.
If you lease or finance your car, you'll most likely need to carry full-coverage car insurance.
How does liability car insurance work?
Liability car insurance covers damage to the other person’s vehicle along with their medical costs if you cause an accident. You can’t use liability coverage to fix your own vehicle or pay your medical bills, but it reduces the burden of having to pay out of pocket for someone else’s accident-related expenses.
Without liability car insurance, you would be entirely responsible for paying the other driver's costs should they sue you and win damages. Also, you’d face penalties such as fines or a suspended license if you live in a state that requires liability insurance. These states provide minimum coverage limits, but you can purchase additional coverage.
When you file a claim, your insurance company will pay up to your coverage limit.
What does liability car insurance cover?
Liability insurance primarily covers costs for bodily injury and property damage, including the following expenses for the other driver in an accident you caused:
Emergency room visit after the accident
CT scan and other medical tests
Extended hospital stay
Physical therapy
Vehicle and auto-body repairs
Vehicle replacement (if the car is totaled)
Damage to other property, such as a fence or phone pole
Most states use an at-fault judgment, which means if there’s an accident, both drivers’ insurance companies will determine who was responsible. Then, the at-fault driver needs to file a claim for insurance to cover the other person’s expenses from the damage.
In no-fault states, expenses are covered by each driver’s policy through personal injury protection (PIP) coverage.
What doesn’t liability car insurance cover?
Whether you’re at fault or not, liability insurance doesn’t cover damage to your vehicle or your medical expenses due to an accident. Comprehensive and collision insurance extend coverage to your own vehicle and medical expenses.
Ideally, when both drivers have liability coverage, their insurance will cover the other driver’s vehicle and medical expenses depending on who’s at fault. So if you’re not at fault and someone rear-ends you, for example, their insurance would cover you.
However, if the damage exceeds the coverage limit or you have additional expenses, like needing a rental car to get around while your vehicle is being fixed, liability coverage may not provide adequate coverage.
Likewise, if you hit an object such as a fence or mailbox, and damage your car, liability insurance won’t apply since you’d be at fault. Plus, there’s no other driver with insurance to cover your expenses.
You'll need to buy collision insurance to cover these types of damage.
Good to know
Liability insurance also won’t help you if you’re hit by another driver who doesn’t have insurance or who has too little insurance. In those situations, uninsured or underinsured motorist coverage would pay. But those coverages are typically optional, so you’ll have to choose them and pay an additional premium for them.
Types of liability auto insurance
Different types of liability insurance affect what your insurer will cover. Minimum requirements for liability insurance vary by state, so the following options may not be required in your state.
State requirements for liability insurance
Depending on where you live, your minimum liability limits will vary because states set their own requirements for registered drivers. Find the minimum insurance requirements, as listed by the Insurance Information Institute, for your state in the table below. The split limit for Alabama, for example, is 20/50/25. The first number represents bodily injury per person, the second represents bodily injury per accident, and the final number represents property damage per accident.
Disclaimer: Table data sourced from real-time quotes from Insurify's 500+ partner insurance providers. Actual quotes may vary based on the policy buyer's unique driver profile.
Average cost of liability insurance by state
Insurance costs can vary significantly based on location, and the amounts and types of insurance a state requires drivers to carry. Here's a look at the average cost of liability insurance in each state, based on Insurify data.
Additional auto insurance coverage
Liability coverage provides the minimum car insurance required, but other options with more coverage exist. Though liability coverage presents the cheapest option and protects you from paying out of pocket for the other driver’s medical and vehicle expenses, it offers little to no protection for your own medical costs and vehicle repairs.
Additional auto insurance coverage or a more comprehensive policy helps you avoid costly medical bills and medical collections, along with some money to repair or replace your car sooner. Find information about three other types of car insurance coverage options to consider below:
Collision: Collision insurance covers repairs to your car as a result of an accident with another vehicle or if your car hits an object such as a light pole or mailbox. Additionally, it covers damage to your car from potholes and rollover accidents. Insurers sell collision coverage with a separate deductible and will reimburse you regardless of fault.
Comprehensive: Comprehensive coverage reimburses you for damage to your car caused by something other than a collision or loss due to theft. Insurers require drivers who finance their cars to have comprehensive coverage. It covers damages due to contact with an animal (such as accidentally hitting a deer on the road), fallen objects, broken windshields, weather hazards, and riots or vandalism.
Full coverage: Full coverage usually means you have comprehensive and collision insurance, along with anything else your state requires. Since most states require liability, full coverage indicates you have all three. When you finance a car, your lender usually requires you to have full-coverage car insurance.
Liability car insurance FAQs
Carrying liability coverage can keep you compliant with state laws that require a certain amount of coverage. And liability can help pay for the other driver's property damage and injury costs you're financially responsible for in an accident you caused. But insurance professionals often recommend drivers buy liability limits above state minimums for greater financial protection. Here are answers to some commonly asked questions about liability coverage.
What is liability car insurance?
Liability car insurance covers damage to another person’s vehicle and their medical costs from an accident you caused. If you get into an accident and are responsible, you’ll exchange insurance information with the other driver. Then, contact your insurance company to file a claim so your insurer can send a payment to the other driver. Most states require liability insurance and each state sets its own minimum coverage amount requirements.
What does it mean to live in a no-fault state for car insurance?
No-fault states require drivers to file a claim with their insurance company regardless of fault. These states also require drivers to purchase PIP coverage in addition to their auto insurance policy. PIP coverage pays for medical expenses, lost wages, and related costs due to the aftermath of an accident.
At-fault states make the driver responsible for causing the accident use their insurance to cover the other driver’s vehicle damages and any medical expenses.
Does liability auto insurance cover damages to your vehicle?
No, liability insurance only covers damages to the other person’s vehicle. Comprehensive and collision insurance do cover damages to your car. This additional coverage makes it worth purchasing on top of your state’s minimum required liability insurance, depending on your financial situation and insurance needs.
How do split limits vary from combined limits?
Split-limit car insurance policies present liability coverage by the following categories:
Bodily injury per person
Bodily injury per accident
Property damage per accident
For example, in Ohio, the liability coverage limit is 25/50/25. This means insurance will cover up to the following:
$25,000 for the other driver’s injuries
$50,000 in total for the other driver’s injuries as well as any of their passengers
$25,000 for damage to their vehicle
A combined limit merges everything so you have one limit for bodily injury and property damage. You can divide a combined limit up in any way to cover bodily injury or property damage after an accident instead of having separate limits.
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