Liability car insurance pays for other parties’ bills after an at-fault accident. You’ll pay $44 monthly on average for this legally required insurance, but you should always compare liability insurance
Liability Car Insurance: Coverage, Costs, Advantages and Disadvantages
Liability car insurance is one of the most important types of auto insurance coverage for drivers in the United States. It is designed to protect you financially when you cause an accident that injures another person or damages someone else’s property.
Unlike comprehensive and collision insurance, liability coverage generally does not pay to repair your own vehicle. Instead, it helps cover the costs you are legally responsible for after an accident.
Most states require drivers to carry at least a minimum amount of liability insurance before they can legally drive.
What Is Liability Car Insurance?
Liability car insurance provides financial protection when you are responsible for an accident involving another person.
If you cause a crash, you could be responsible for expenses such as:
- Another driver’s medical treatment
- Passenger injuries
- Lost income
- Vehicle repair costs
- Damage to buildings or other property
- Certain legal expenses
Your insurance company can pay covered costs up to the limits stated in your policy.
Because accident-related expenses can become extremely expensive, choosing only the minimum required coverage may leave you financially exposed.
Types of Liability Car Insurance
Liability insurance is generally divided into two primary categories:
- Bodily injury liability
- Property damage liability
Both serve different purposes, but together they provide financial protection when you cause an accident.
Bodily Injury Liability Insurance
Bodily injury liability coverage helps pay for injuries suffered by other people when you are responsible for an accident.
Depending on your policy and applicable laws, covered expenses may include:
- Emergency medical treatment
- Hospital bills
- Doctor visits
- Rehabilitation
- Lost wages
- Long-term treatment
- Funeral expenses in a fatal accident
For example, suppose you cause an accident and another driver suffers serious injuries. Their medical expenses and lost income could become substantial.
Your bodily injury liability coverage can help pay eligible expenses up to your policy limits.
What Bodily Injury Liability Does Not Cover
Bodily injury liability generally does not pay for your own medical expenses or the medical costs of passengers in your vehicle.
Depending on your state and policy, you may need other coverage such as:
- Medical payments coverage
- Personal injury protection
- Health insurance
- Uninsured/underinsured motorist coverage
Property Damage Liability Insurance
Property damage liability coverage helps pay for damage you cause to someone else’s property during an accident.
This can include:
- Another vehicle
- A fence
- A mailbox
- A building
- Landscaping
- Other damaged property
For example, if you accidentally lose control of your car and hit another vehicle worth $25,000, property damage liability can help pay for the covered damage up to your policy limit.
However, if the damage exceeds your coverage limit, you may be responsible for the remaining amount.
What Does Liability Car Insurance Cover?
Liability coverage is primarily designed to protect other people from the financial consequences of an accident you cause.
It can potentially help cover:
Bodily Injury Costs
- Medical bills
- Emergency services
- Rehabilitation
- Lost wages
- Long-term treatment
- Funeral expenses
Property Damage Costs
- Vehicle repairs
- Replacement of damaged property
- Damage to structures
- Other eligible property losses
Legal Expenses
If another party files a lawsuit after an accident you caused, your liability insurance may also provide legal defense and related costs, subject to your policy’s terms and limits.
This is another reason why having adequate liability limits is important.
What Does Liability Insurance Not Cover?
Liability insurance provides important protection, but it is not designed to cover every loss.
Generally, liability-only insurance does not pay for:
- Repairs to your own vehicle
- Your own medical expenses
- Medical expenses for your passengers
- Damage exceeding your policy limits
- Theft of your vehicle
- Vandalism to your vehicle
- Hail or storm damage
- Flood damage
- Other non-collision damage to your vehicle
Additional insurance coverage may be necessary to protect you from these risks.
Liability Insurance vs. Full Coverage
Liability insurance and full coverage are not the same.
A liability-only policy primarily protects you against claims from other people when you cause an accident.
A broader full-coverage policy commonly combines liability insurance with coverages such as comprehensive and collision.
| Liability Insurance | Full Coverage |
|---|---|
| Covers damage you cause to others | Includes liability plus additional protection |
| Covers eligible third-party injuries | Can protect your own vehicle |
| Covers eligible property damage | Usually includes collision |
| Usually required by state law | Generally optional by state law |
| Does not repair your car after an at-fault accident | Collision can help repair your car |
| Usually cheaper | Usually more expensive |
The right option depends on your vehicle, financial situation, state requirements and risk tolerance.
Advantages of Liability Car Insurance
Liability insurance offers several important benefits.
1. Meets Legal Requirements
Most states require drivers to maintain a minimum level of liability coverage.
Carrying the required insurance helps you remain legally compliant.
2. Protects Your Finances
A serious accident can result in thousands or even hundreds of thousands of dollars in medical and property damage costs.
Liability insurance can absorb covered expenses up to your policy limits.
3. Covers Damage to Other Vehicles and Property
Property damage liability can help pay for damage you cause to another vehicle, building, fence or other property.
4. Helps With Injury Claims
Bodily injury liability can provide financial protection if another person is injured in an accident you caused.
5. Usually Costs Less Than Full Coverage
Liability-only insurance is generally less expensive than policies that also include comprehensive and collision coverage.
This can make it attractive to drivers who own older vehicles with relatively low market values.
6. May Provide Legal Protection
Liability insurance can provide legal defense when you face a covered claim or lawsuit resulting from an accident.
Disadvantages of Liability Car Insurance
Liability coverage also has some important limitations.
1. It Does Not Protect Your Own Vehicle
If you cause an accident and damage your own car, liability insurance generally won’t pay for your repairs.
You would need collision coverage for that type of protection.
2. It Does Not Cover Your Own Injuries
Your liability policy is intended to cover other injured parties, not your own medical expenses.
Additional medical-related coverage may be necessary.
3. Minimum Limits May Be Too Low
State minimum requirements are not necessarily enough to protect you financially.
A serious accident can cost far more than the minimum amount required by law.
4. You May Pay Out of Pocket
If an accident produces costs greater than your policy limits, you may be personally responsible for the remaining amount.
5. No Protection Against Theft or Weather
Liability insurance does not normally cover your vehicle against theft, hail, flooding, fire or vandalism.
Comprehensive coverage is generally used for these types of risks.
Why Higher Liability Limits Can Be a Smart Choice
State minimum insurance requirements provide the minimum legal protection, but they may not provide enough financial protection.
Imagine your state requires only $10,000 in property damage liability and you cause an accident that damages a vehicle worth $30,000.
Your insurance could cover the eligible amount up to your policy limit, but you could still be responsible for the remaining $20,000.
This is why many drivers choose liability limits that are higher than their state’s minimum requirement.
When selecting limits, consider:
- Your income
- Your assets
- Your savings
- The value of your property
- Your ability to pay unexpected expenses
- The amount of financial risk you are comfortable accepting
Understanding Liability Insurance Limits
Liability limits are commonly displayed using three numbers.
For example:
25/50/25
These numbers generally represent:
- $25,000 bodily injury coverage per person
- $50,000 bodily injury coverage per accident
- $25,000 property damage coverage per accident
The exact limits available and required vary by state.
Drivers should understand their state’s requirements before selecting a policy.
Liability Car Insurance Requirements by State
Each state establishes its own minimum insurance requirements, and these requirements can change over time.
Common liability-limit formats include three numbers representing bodily injury per person, bodily injury per accident and property damage.
| State | Common Minimum Liability Limit |
|---|---|
| Alabama | 25/50/25 |
| Alaska | 50/100/25 |
| Arizona | 25/50/15 |
| Arkansas | 25/50/25 |
| California | 30/60/15 |
| Colorado | 25/50/15 |
| Connecticut | 25/50/25 |
| Delaware | 25/50/10 |
| Florida | 10/20/10 |
| Georgia | 25/50/25 |
| Hawaii | 20/40/10 |
| Idaho | 25/50/15 |
| Illinois | 25/50/25 |
| Indiana | 25/50/25 |
| Iowa | 20/40/15 |
| Kansas | 25/50/25 |
| Kentucky | 25/50/25 |
| Louisiana | 15/30/25 |
| Maine | 50/100/25 |
| Maryland | 30/60/15 |
| Massachusetts | 20/40/5 |
| Michigan | 50/100/10 |
| Minnesota | 30/60/10 |
| Mississippi | 25/50/25 |
| Missouri | 25/50/25 |
| Montana | 25/50/20 |
| Nebraska | 25/50/25 |
| Nevada | 25/50/20 |
| New Hampshire | 25/50/25 |
| New Jersey | 15/30/5 |
| New Mexico | 25/50/10 |
| New York | 25/50/10 |
| North Carolina | 30/60/25 |
| North Dakota | 25/50/25 |
| Ohio | 25/50/25 |
| Oklahoma | 25/50/25 |
| Oregon | 25/50/20 |
| Pennsylvania | 15/30/5 |
| Rhode Island | 25/50/25 |
| South Carolina | 25/50/25 |
| South Dakota | 25/50/25 |
| Tennessee | 25/50/15 |
| Texas | 30/60/25 |
| Utah | 25/65/15 |
| Vermont | 25/50/10 |
| Virginia | 50/100/25 |
| Washington | 25/50/10 |
| West Virginia | 25/50/25 |
| Wisconsin | 25/50/10 |
| Wyoming | 25/50/20 |
Important: State insurance laws can change. Drivers should verify current requirements with their state’s insurance regulator or DMV before purchasing a policy.
Other Types of Car Insurance to Consider
Liability insurance is important, but it may not provide enough protection on its own.
Depending on your situation, you may want to consider additional coverage.
Collision Coverage
Collision insurance can help pay to repair your vehicle after a covered collision.
It can apply when you:
- Hit another vehicle
- Hit a stationary object
- Crash into a barrier
- Have a covered single-car accident
Comprehensive Coverage
Comprehensive insurance protects against many non-collision risks, including:
- Theft
- Fire
- Hail
- Flooding
- Vandalism
- Falling objects
- Animal damage
Medical Payments Coverage
Medical payments coverage can help pay medical expenses for you and your passengers after a covered accident, depending on your policy and state.
Personal Injury Protection
Personal injury protection, commonly called PIP, can provide broader benefits in states where it is available or required.
It may help with:
- Medical expenses
- Lost income
- Rehabilitation
- Certain household or childcare expenses
Uninsured and Underinsured Motorist Coverage
This coverage can protect you when another driver causes an accident but doesn’t have enough insurance, or has no insurance at all.
How Much Does Liability Car Insurance Cost?
The price of liability insurance varies from driver to driver.
Your premium can be influenced by:
- State and ZIP code
- Age
- Driving history
- Claims history
- Vehicle type
- Coverage limits
- Credit-based insurance factors where permitted
- Annual mileage
- Insurance company
Because every insurer evaluates risk differently, comparing several quotes can help you find a competitive rate.
How to Save Money on Liability Insurance
There are several ways to potentially lower your premium without reducing your protection unnecessarily.
Compare Multiple Companies
Insurance prices can differ substantially between companies. Get several quotes and compare equivalent coverage limits.
Ask About Discounts
Depending on the insurer, discounts may be available for:
- Safe driving
- Multiple vehicles
- Bundling policies
- Anti-theft devices
- Defensive driving courses
- Paying the premium in full
Maintain a Clean Driving Record
Speeding tickets, at-fault accidents and serious violations can increase insurance costs.
Driving safely can help keep your premiums more manageable over time.
Choose Your Vehicle Carefully
Some vehicles are more expensive to insure because of their repair costs, theft rates or accident statistics.
If insurance cost is important to you, compare insurance quotes before purchasing a vehicle.
Review Your Policy Regularly
Your circumstances can change over time. Review your coverage whenever you buy a new vehicle, move, add a driver or experience another major change.
Examples of Liability Insurance Claims
Example 1: Medical Expenses
You cause an accident and another driver requires $15,000 in medical treatment.
If your bodily injury liability coverage applies and your policy limits are sufficient, your insurer can help cover the eligible expenses.
Example 2: Property Damage
You accidentally hit another driver’s vehicle and cause $18,000 in damage.
Your property damage liability coverage may pay the covered repair costs up to your policy limit.
Example 3: Costs Exceed Your Policy Limit
Suppose you cause an accident resulting in $75,000 of covered property damage but your policy only provides $25,000 of property damage liability coverage.
The insurer generally won’t pay beyond the applicable limit. You could potentially be responsible for the remaining amount.
This demonstrates why choosing adequate liability limits is important.
Liability Car Insurance: Pros and Cons at a Glance
| Advantages | Disadvantages |
|---|---|
| Meets legal insurance requirements in most states | Doesn’t cover damage to your own vehicle |
| Protects against third-party injury claims | Doesn’t normally cover your own medical bills |
| Helps pay for property damage you cause | Minimum limits may be inadequate |
| Can provide legal defense for covered claims | You may owe costs above your limits |
| Usually cheaper than full coverage | Doesn’t cover theft or weather damage |
| Can protect your personal finances | Provides limited protection by itself |
Frequently Asked Questions
Is liability car insurance required?
Most states require drivers to carry minimum liability insurance, although the exact requirements differ by state.
What does liability insurance pay for?
Liability insurance generally helps pay for bodily injuries and property damage you cause to other people when you are legally responsible for an accident.
Does liability insurance cover my car?
No. Liability coverage generally does not pay for damage to your own vehicle. Collision and comprehensive coverage can provide additional protection.
Does liability insurance cover my medical bills?
Generally, no. Liability insurance is designed to cover other parties’ injuries when you cause an accident. Medical payments or personal injury protection may help with your own medical expenses, depending on your policy and state.
Is minimum liability insurance enough?
Not necessarily. State minimums are designed to satisfy legal requirements, but they may not be enough to cover the full cost of a serious accident.
Should I buy more liability insurance than my state requires?
For many drivers, carrying higher limits can provide greater financial protection. The appropriate amount depends on your financial situation and risk exposure.
Is liability-only insurance good for an older car?
It can make sense for some owners of older, low-value vehicles, particularly when the cost of comprehensive and collision coverage isn’t justified by the vehicle’s value.
However, liability-only insurance means you would generally have to pay for your own vehicle repairs after an accident you cause.
How can I find cheap liability car insurance?
The best approach is to compare quotes from multiple insurers while keeping the coverage limits consistent. You can also ask about discounts and maintain a clean driving record.
Final Thoughts
Liability car insurance is the foundation of an auto insurance policy. It helps protect drivers financially when they cause injuries or property damage to someone else.
Although purchasing only the minimum required coverage can reduce your monthly premium, minimum limits may leave you exposed to significant out-of-pocket expenses after a serious accident.
For that reason, drivers should look beyond the legal minimum and consider their personal financial situation when selecting liability limits.
The best policy isn’t necessarily the cheapest one. Compare multiple insurance quotes, evaluate the available coverage limits and choose protection that provides a reasonable balance between cost and financial security.