Liability car insurance is arguably the most important type of insurance to carry, as it helps cover injuries or damage after an at-fault accident. In this article, we’ll talk about what liability coverage is, why you need it, and how much to pay for it.
While any company can provide you with liability insurance coverage, not all are equal in terms of cost, value, reliability, and customer service. To make shopping for car insurance less of a hassle, we’ve reviewed dozens of car insurance companies on the market. At the end of the day, we only recommend a few of the best car insurance companies.
You should compare quotes from at least three providers before making a decision to ensure that you get the best deal, as quotes can differ greatly depending on your state, car, age, driving history, and more. To start, we recommend that you get matched with the best car insurance quotes in your area by calling (844) 246-8209 or filling out the form below:
What Is Liability Car Insurance?
Liability car insurance is the part of your auto insurance policy that helps pay for the other driver’s expenses, such as medical bills and property damage of other drivers and passengers if you cause a car accident.
Liability insurance can be broken down into bodily injury liability coverage and property damage liability coverage. As the names indicate, bodily injury liability insurance covers any bodily damages you may have caused to the other driver and covers the cost of their medical treatment. Property damage liability insurance covers the cost of any damages to property you may have caused, including damages to their car.
Your car insurance company will only pay up to the limits that you pick for your auto policy – if the costs exceed your coverage limits, you’ll have to cover the difference, which is why it may be a good idea to purchase more car insurance coverage than required by your state.
What’s Not Covered By Liability Car Insurance
While liability insurance is important, but it only protects the other driver in the case of an at-fault car accident. Here are some things it won’t pay for:
- Damage to your own car
- Your medical bills
- Hit-and-run compensation
- Lost wages after an accident
- Rental car coverage
Instead, these situations can be covered by different types of car insurance.
Other Types Of Car Insurance
Liability car insurance is just one part of a standard car insurance policy. Here are some other types of car insurance coverage you can add to protect yourself, some of which are required by your state’s financial responsibility laws:
- Collision coverage: Covers damage to your car after an accident, no matter who was at fault
- Comprehensive coverage: Covers damage from environmental events like falling branches or hail, as well as theft and vandalism
- Medical payments (MedPay): Covers a portion of your medical expenses and can pay your health insurance deductible
- Personal injury protection (PIP): Covers your health costs, lost wages, and death benefits
- Uninsured/underinsured motorist (UM/UIM): Covers your bills after getting hit by an uninsured or underinsured driver and can cover hit-and-runs
- Roadside assistance: On-demand help for spare tire changes, lockout service, jump starts, and more
- Rental coverage: Pays toward a rental car up to the limits that you choose
The combination of liability, collision, and comprehensive is called full coverage. However, that’s a bit of a misnomer since it doesn’t include medical coverage or coverage for uninsured driver accidents.
Liability Car Insurance Limits
Every state has financial responsibility laws that dictate how much car insurance coverage a driver is required to have to legally drive in that state. This means that each state can decide how much liability coverage drivers should have.
The required liability car insurance can be broken down into three separate limits: bodily injury liability per person, bodily injury per accident, and property damage liability per accident. You’ll see these coverages written together as three numbers separated by slashes.
For example, a 25/50/25 liability car insurance plan covers:
- $25,000 for bodily injury claims per person
- $50,000 for bodily injury claims per accident
- $25,000 for property damage claims
Most states require this amount of liability car coverage. Some states require less, and a couple of states require limits of 50/100/25.
Some plans come with a combined limit. In this case, you’d have one limit that any type of bodily injury or property damage claim would count toward.
How Much Liability Insurance Do You Need?
Generally, it’s a good idea to carry at least 100/300/100 in liability car insurance. Higher liability limits can save you from potentially catastrophic situations, and state minimum limits can be exhausted quickly.
Let’s say you rear-ended a car that had two people inside. You have a liability policy matching your state’s required minimum amount of 25/50/25. Each passenger claims $10,000 in medical bills, and the car has $5,000 in damage. The medical payments coverage fits into your plan’s policy limits of $25,000 per person and $50,000 total per accident. Likewise, the damage claim is also covered.
Now, what if you get into a more serious accident? Each injured party claims $40,000 for surgeries and ongoing treatment. The car is also totaled, and it was worth $30,000. Your policy would get used up. Then, the driver and passenger could take you to court for the money they haven’t received. You would still owe $15,000 to each person and $5,000 to cover the car, which is $40,000 in total.
Today, it isn’t hard to cause an accident that exceeds the liability limits in the second scenario. Cars are getting more expensive all the time, especially with high-tech safety and automated features. The same goes for healthcare, where just one surgery and a few specialist visits could wipe out your liability coverage.
Extending your liability insurance coverage from your state’s minimum to 100/300/100 could add about $50 to $100 to your policy per month. That’s not an insignificant bill. However, it can help you avoid financial stress or bankruptcy later on.
How Much Does Liability Car Insurance Cost?
According to the Insurance Information Institute (III), drivers spent about $567 on liability coverage in 2016. That would work out to be about $47.25 per month. Some drivers just get liability car insurance, while others choose to add more options for better coverage.
Be aware that states can require other types of coverage in addition to liability. For example, Maryland requires personal injury protection, and Illinois requires uninsured motorist coverage. Also, the price for auto liability insurance varies by state. Louisiana drivers spend around $835 on liability coverage according to the III, while drivers in Indiana spend approximately $399.
Things like age, driving record, average mileage, and zip code can all affect prices. The best way to get a good deal is to get multiple auto insurance quotes.
Our Recommendations For Liability Car Insurance
Not all insurance providers are created equal. Some charge a lot for a little bit of coverage. Some are cheap but have lousy customer service. You don’t want to sign up for insurance and figure that out after.
It’s always a good idea to get at least three insurance quotes when you shop for car insurance. Here are a couple of companies that stand out from the rest.
Use the tool below to collect and compare quotes from providers available in your state. For an easier process, call our team at (844) 246-8209.
USAA: 4.8 Stars
USAA is our top pick for car insurance. However, not everyone can qualify. The company offers insurance for military members, veterans, and their spouses and children.
Why USAA? It was the only auto insurance company in our industry-wide review that had the lowest prices and best customer service across the board. Read our full USAA auto insurance review to learn more about coverage.
Geico: 4.6 Stars
Aside from USAA, we rated Geico auto insurance as the best choice overall. Geico has an app with high ratings that makes filing a claim easy. As the second-largest insurer in the United States, it offers a wide range of coverage options. If you’re in Connecticut or Pennsylvania, you can also use the DriveEasy app to save on your insurance (Geico will roll out the app to more states in the future). To learn more, read our full Geico auto insurance review.
Progressive: 4.6 Stars
In our research, Progressive auto insurance also performed well across multiple categories. Drivers are generally happy with their experiences with the company and the prices they pay. And if you’re into technology, Progressive is the one for you.
Progressive’s Snapshot program tracks your driving and can show you how your skills improve over time. Plus, it doles out some hefty discounts to the best drivers. Also, Progressive’s quote comparison tool and Name Your Price® tool make shopping for insurance a bit easier. To learn more, read our full Progressive auto insurance review.
Liability Auto Insurance: FAQ
In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of auto insurance providers to formulate rankings of the best insurers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.
- Industry Standing: Insurers with strong financial ratings and customer-first business practices receive the highest scores in this category.
- Availability: We consider availability by state as well as exclusions for specific groups of drivers.
- Coverage: This rating is based on types of insurance available, maximum coverage limits, and add-on policies.
- Cost and Discounts: Our research team reviews sample quotes for a variety of drivers in every state. Companies with lower prices and many car insurance discount opportunities receive the best scores.
- Customer Service: We comb through customer reviews and consumer feedback studies from experts like J.D. Power.
- Technology: Auto insurers with mobile apps, advanced online services and telematics are more likely to meet consumer needs.