Guide to liability car insurance

Liability car insurance covers the costs when you’re responsible for an accident. But it doesn’t cover your own injuries or damage to your vehicle.

Andrew Hurst

By

Andrew Hurst

Andrew Hurst

Senior Editor & Licensed Auto Insurance Expert

Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

Updated|8 min read

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Liability car insurance is one of the basic forms of coverage, and it’s included in almost every auto insurance policy. Liability car insurance covers damage that you cause to someone else in a crash, including their medical bills and the cost to repair their car or other property. Your liability insurance can also cover legal fees if you’re sued.

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Liability car insurance is relatively affordable — raising your coverage limits by tens of thousands of dollars might only have a small impact on your auto insurance rates. But your liability coverage doesn’t cover damage to your own car, in order for your insurance to cover damage and theft you’ll need to add other types of coverage.

Key takeaways

  • Liability car insurance covers damage and injuries when you’re responsible for a car accident.

  • Liability coverage is broken into two parts, bodily injury liability and property damage liability.

  • Nearly every state requires at least some amount of both bodily injury liability and property damage liability coverage.

  • Liability insurance does not cover your damage to your own vehicle or your own injuries after a crash.

What is liability car insurance?

Liability car insurance is the part of your auto insurance that covers the cost of medical bills and property damage you’re responsible for after an accident. Nearly every state requires you to have liability insurance in order to to drive.

If you cause a car crash, the other drivers involved can make a claim with your car insurance company. Your liability coverage, or third-party liability coverage, will pay for damage on your behalf (up to your policy’s limits).

What does liability insurance cover?

When it comes to car insurance, liability coverage is broken up into two parts: bodily injury liability and property damage liability.

  • Bodily injury liability coverage: Covers injuries that you cause to another person in an accident, as well as their related expenses, like lost wages.

  • Property damage liability coverage: Covers the cost of repairing or replacing damaged property after an accident — typically the other driver’s vehicle, but this can also cover the cost if you hit a fence, building, or another type of structure.

Together, these coverages are sometimes referred to as PLPD insurance — personal injury liability and property damage.

Can you get liability-only car insurance?

Yes, it’s possible to get a car insurance policy that’s only liability coverage (plus anything else that’s required in your state) instead of full coverage.

But even if you own your car outright or if you have an old car and you don’t need comprehensive or collision, you should still set your liability limits as high as you can afford.

Since state minimum requirements are usually low, getting only the required amount of liability insurance could leave you stuck with tens of thousands of dollars’ worth of bills if you’re involved in a serious accident.

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What is not covered by liability car insurance?

Liability insurance provides a lot of protection, but there are some things it doesn’t cover, like your own injuries after a car accident or any damage to your own car. 

You may need to supplement your liability insurance with other types of car insurance coverage, some of which are required by law and some of which are optional. These include:

  • Collision coverage: Your auto liability insurance doesn’t cover damage to your own car after an at-fault accident. You can add collision coverage, which is one part of a full-coverage policy, to cover damage from a crash, no matter who was at fault.

  • Comprehensive coverage: Comprehensive insurance (also called “everything-but-collision coverage”) covers the cost if your car is stolen, vandalized, or damaged by things like weather or falling objects.

  • Uninsured/underinsured motorist coverage: This  covers the costs if your car is damaged in a hit-and-run or by someone without insurance (or without enough insurance) of their own. 

  • Personal injury protection: Abbreviated as PIP insurance, personal injury protection is required in no-fault states, where your injuries and medical expenses are covered by your own car insurance, no matter who was at fault.

  • Medical payments coverage: Sometimes shortened to MedPay, this medical expenses for you and your passengers when you’re hurt in an accident. Unlike PIP, it’s typically optional, and usually comes with lower limits.

  • Roadside assistance: Roadside assistance, also called towing and labor coverage, covers emergency services if you’re stranded, including tire changes, battery jumps, tow trucks, and lockout services.

  • Gap coverage: If your car is totaled and the settlement isn’t enough to pay off your lease or loan, gap insurance makes up the difference.

  • New car replacement: If your car is totaled, this pays out enough to replace your car with a new version of the same model. New car replacement is usually only available for cars that are a few model years old or newer.

What is full-coverage car insurance?

Full-coverage car insurance isn’t actually a type of policy, it’s just a term that describes car insurance that includes comprehensive and collision coverage in addition to liability. Comprehensive and collision coverage are never required by law, but they may be required if you lease or finance your car.

→ Read more about different types of car insurance coverage

How do liability insurance coverage limits work?

It can be difficult to understand just how much liability car insurance your policy includes. Usually, liability on a car insurance policy’s declarations page will be listed with slash marks or split limits, like 50/100/10. That might look confusing, but it just means you have:

  • $50,000 in bodily injury liability coverage per person

  • $100,000 total in bodily injury coverage per accident

  • $50,000 in property damage liability coverage per accident

Let’s say you have a policy with these limits of liability and you’re at fault for a crash involving another driver. The other driver’s medical bills only amount to $5,000, but their passenger’s come to $25,000. Since both people’s injuries total less than your policy’s $50,000 per person limit, and together equal less than $100,000, your liability insurance would pay for all costs.

Depending on the company, you may be able to get auto liability insurance as a combined single limit. If you have combined single limit liability car insurance (CSL), that means your insurance company would cover damages up to a single amount instead of capping the amount one person could receive.

Is there a deductible on liability car insurance?

No, unlike comprehensive and collision insurance, liability insurance has no deductible that comes out of a final settlement.

Is umbrella coverage a type of liability insurance?

Umbrella coverage is a separate liability policy that you can buy in addition to your regular auto, home, or condo insurance. Umbrella insurance adds extra liability coverage for anything that might come up (that’s why it’s called “umbrella”). 

For example, if you’re in an at-fault accident and the damage you’re responsible for is thousands of dollars over your car insurance limit, your umbrella policy would step in to cover the extra costs.

You can often get umbrella insurance in increments of up to $1 million. Since it’s not meant to be a form of primary insurance coverage, umbrella insurance is usually relatively cheap for the amount of protection that you’re able to buy.

Not everyone needs umbrella insurance, but it may be a good idea for you if you have lots of assets you’d want to protect in case of a lawsuit, like more than one home or a boat. Certain risk factors, like owning a pool or a trampoline, might make adding umbrella insurance a good idea as well.

How much liability insurance do I need?

It’s not expensive to add a lot of liability coverage to your policy, so you should plan on getting as much as you can reasonably afford.

We recommend limits of 100/300/100, meaning at least $100,000 of bodily injury liability insurance per person and $300,000 per accident, plus $100,000 of property damage liability insurance.

Your state may only require a small amount of liability coverage in order to drive legally, but these minimum amounts offer only slim protection after an accident. With minimum amounts of liability insurance, you might have to pay the cost of serious injuries and property damage mostly on your own.

If your car insurance is too expensive, try other ways to lower your rates before you reduce your liability coverage — like shopping around and comparing quotes, dropping unnecessary coverages, raising your deductible amounts, or making sure you’re getting every possible discount.

What happens if I don’t have enough liability coverage?

You need at least enough liability insurance to meet your state’s minimum requirements. If you’re caught driving without insurance, you’ll face steep fines and the possibility for even more serious punishments. It would also be even harder to find cheap insurance later on.

But what happens if you don’t have enough liability coverage to cover the costs of an at-fault accident? Say your property damage limit is $50,000 but you cause $63,000 worth of damage in a multi-car accident. 

Since you don’t have enough liability insurance to pay for all that damage, you’ll be responsible for paying for the extra $13,000 out of pocket, which might mean your assets, like your home or savings, would be at risk.

Fortunately, you don’t have to worry about not buying enough liability insurance to drive legally. Any broker, agent, or website that you used to get quotes wouldn’t allow you to get covered if you tried to purchase less insurance than the legal minimum amounts.

→ Read more about how much car insurance you should get 

What does liability car insurance cost?

The cost of liability insurance makes up the largest amount of a basic car full-coverage insurance policy. Data from the National Association of Insurance Commissioners shows that the average premium for the liability insurance portion of a policy is about 54% of its total cost. [1]

Coverage type

Average monthly cost

Average annual cost

Liability

$54

$650

Collision

$32

$381

Comprehensive

$14

$172

Source: NAIC’s 2018-19 Auto Insurance Database Report (2022)

That said, it’s very cheap to add more liability car insurance to your policy. Our research shows that increasing a policy’s liability insurance by $50,000 raises your car insurance by only $175 per year, or $15 per month. 

That means that every $10,000 of liability insurance costs an extra $35 per year.

Amount of liability insurance

Monthly cost

Annual cost

Minimum limits

$52

$620

$50k per person/ $100k per incident

$138

$1,652

$100k per person/ $300k per incident

$152

$1,827

Source: Policygenius analysis of data from Quadrant Information Services

The cost of minimum coverage liability car insurance — a policy with the lowest legal amount of liability insurance in your state — is $51 per month, but rates can vary by company.

Company

Monthly cost

Annual cost

USAA

$31

$372

GEICO

$33

$396

State Farm

$40

$480

Nationwide

$52

$624

American Family

$56

$672

Travelers

$57

$684

AAA

$59

$708

Progressive

$61

$732

Allstate

$62

$744

Farmers

$65

$780

Cost of car insurance with the minimum amount of liability coverage.

Minimum liability insurance requirements by state

Each state has its own requirements for how much liability car insurance drivers must have in order to drive legally. But no matter where you live, you should have more coverage than just your state’s minimum liability insurance requirements.

Keep in mind that in addition to liability car insurance, your state may also require you to have other types of coverage, like PIP or uninsured/underinsurance motorist coverage.

State

Bodily injury liability minimums

Property damage liability minimum

Alabama

$25,000/$50,000

$25,000

Alaska

$50,000/$100,000

$25,000

Arizona

$25,000/$50,000

$15,000

Arkansas

$25,000/$50,000

$25,000

California

$15,000/$30,00

$5,000

Colorado

$25,000/$50,000

$15,000

Connecticut

$25,000/$50,000

$25,000

Delaware

$25,000/$50,000

$10,000

District of Columbia

$25,000/$50,000

$10,000

Florida

Optional

$10,000

Georgia

$25,000/$50,000

$25,000

Hawaii

$20,000/$40,000

$10,000

Idaho

$25,000/$50,000

$15,000

Illinois

$25,000/$50,000

$20,000

Indiana

$25,000/$50,000

$25,000

Iowa

$20,000/$40,000

$15,000

Kansas

$25,000/$50,000

$25,000

Kentucky

$25,000/$50,000

$10,000

Louisiana

$15,000/$30,000

$25,000

Maine

$50,000/$100,000

$25,000

Maryland

$30,000/$60,000

$15,000

Massachusetts

$20,000/$40,000

$5,000

Michigan

$50,000/$100,000

$10,000

Minnesota

$30,000/$60,000

$10,000

Mississippi

$25,000/$50,000

$25,000

Missouri

$25,000/$50,000

$10,000

Montana

$25,000/$50,000

$10,000

Nebraska

$25,000/$50,000

$25,000

Nevada

$25,000/$50,000

$20,000

New Hampshire

Optional

Optional

New Jersey

$15,000/$30,000

$5,000

New Mexico

$25,000/$50,000

$10,000

New York

$25,000/$50,000

$10,000

North Carolina

$30,000/$60,000

$25,000

North Dakota

$25,000/$50,000

$25,000

Ohio

$25,000/$50,000

$25,000

Oklahoma

$25,000/$50,000

$25,000

Oregon

$25,000/$50,000

$20,000

Pennsylvania

$15,000/$30,000

$5,000

Rhode Island

$25,000/$50,000

$25,000

South Carolina

$25,000/$50,000

$25,000

South Dakota

$25,000/$50,000

$25,000

Tennessee

$25,000/$50,000

$15,000

Texas

$30,000/$60,000

$25,000

Utah

$25,000/$65,000

$15,000

Vermont

$25,000/$50,000

$10,000

Virginia

$25,000/$50,000

$20,000

Washington

$25,000/$50,000

$10,000

West Virginia

$25,000/$50,000

$25,000

Wisconsin

$25,000/$50,000

$10,000

Wyoming

$25,000/$50,000

$20,000

Minimum amounts of bodily injury and property damage liability coverage required in every state.

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What is no-fault liability car insurance?

Liability insurance in no-fault states works differently than in at-fault states. In no-fault states, your injuries after a car accident are paid for by your own car insurance, regardless of who was at fault.

That’s why drivers in no-fault states have to have personal injury protection (PIP), which pays for your medical bills and other injury-related expenses, like lost wages. The 12 no-fault states are:

  • Florida

  • Hawaii

  • Kansas

  • Kentucky

  • Massachusetts

  • Michigan

  • Minnesota

  • New Jersey

  • New York

  • North Dakota

  • Pennsylvania

  • Utah

You still need car insurance liability coverage even if you live somewhere with a no-fault system. Even though each driver’s injuries are covered by their PIP coverage, severe accidents may mean you’ll need your bodily injury coverage to step in too.

Frequently asked questions

What is the difference between liability insurance vs. full coverage?

Unlike liability car insurance, full coverage isn’t required in any state (though it is required if you finance or lease a car). Full coverage just means it includes comprehensive, and collision coverage in addition to liability (so it covers repairs for your own car if it’s damaged).

Who needs liability insurance?

Every driver should have liability insurance in order to protect themselves from bills for injuries and property damage after a crash. While nearly every state requires some liability insurance, it’s best to have more than your state’s minimum required amounts. Instead, every driver should carry as much liability insurance as they can afford.

Should I get an umbrella policy?

An umbrella policy can help pay the costs if you’re in a car accident that exceeds your auto liability limits, but it will also cover your liability if you’re responsible for damage or injury in any other part of your life. Since getting umbrella insurance is an affordable way to increase your protection, It makes sense to consider an umbrella policy if you have a lot of assets to protect.

Can you drop liability coverage?

There are only two states where you can drop your liability coverage. New Hampshire and Virginia don’t require drivers to carry any insurance — though you have to pay a fee of $500 if you decide not to get insurance. In Florida you can drop your policy’s bodily injury liability coverage, but not your property coverage.

Methodology

Policygenius found the cost of liability insurance by analyzing hundreds of thousands of rates from every ZIP code in the country. We then compared the cost of liability car insurance with the cost of upgrading to a full or complete coverage policy.

For all of these data, we used rates provided by Quadrant Information Services for a 30-year-old single driver. Our sample vehicle was a 2017 Toyota Camry LE driven 10,000 miles/year.

For full coverage, we found the cost of policies with the following limits:

  • Bodily injury liability: $50,000 per person, $100,000 per accident (or $100,000/$300,000 for complete coverage).

  • Property damage liability: $50,000 per accident

  • Uninsured/underinsured motorist: $50,000 per person, $100,000 per accident

  • Comprehensive: $500 deductible

  • Collision: $500 deductible

Some carriers may be represented by affiliates or subsidiaries. Rates provided are a sample of costs. Your actual quotes may differ.

References

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Policygenius uses external sources, including government data, industry studies, and reputable news organizations to supplement proprietary marketplace data and internal expertise. Learn more about how we use and vet external sources as part of our

editorial standards.
  1. National Association of Insurance Commissioners

    . "

    2018-19 Auto Insurance Database Report

    ." Accessed September 23, 2022.

Author

Senior Editor & Licensed Auto Insurance Expert

Andrew Hurst

Senior Editor & Licensed Auto Insurance Expert

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Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

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