Liability car insurance is so important that 48 states require it.
Liability auto insurance is arguably the most important type of auto insurance to carry. Almost every state requires it. And in the two states that don’t require liability, you still have to prove that you have the financial means to 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.
So if the automobile financial responsibility laws of your state require you to have liability auto insurance, you can pretty much pick any insurance company, right? Wrong. While any company can provide you with liability car insurance limits, 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 as the best auto 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 quotes in your area by calling (855) 518-0148 or filling out the form below:
In this article:
- What Is Liability Auto Insurance?
- Liability Car Insurance Crash Course
- Liability Auto Insurance Limits
- How Much Liability Insurance Do I Need?
- How Much Does Liability Car Insurance Cost?
- What’s Not Covered By Liability Auto Insurance
- Our Recommendations For Liability Car Insurance
- FAQs About Liability Auto Insurance
What Is Liability Car Insurance?
Liability car insurance kicks in when you cause an accident. It pays for the medical bills and property damage of other drivers and passengers. However, it only pays up to the limits that you pick for your policy – once the limits are maxed out, you’ll cover the rest.
Liability Car Insurance Crash Course
Let’s back up for a minute. Instead of using the word liability, we could use terms like responsibility or obligation. Each of these has a similar meaning. Ultimately, this type of insurance stands in place of your responsibility to pay for an accident.
When you cause an accident, the other people involved have a legal right to seek payment for their suffering, whether that’s physical or financial. If you didn’t have liability car insurance coverage, they could sue you to get their compensation. And in court, you’d be found responsible and have to pay up.
Without liability car insurance, drivers might go around suing one another left and right. In fact, before 1930, there were no compulsory insurance laws, and victims of car accidents would rarely get the compensation they deserved.
Today, each state has financial responsibility laws. If you have the means, you can fulfill these laws by depositing a large sum into a state bank account to use in the case of an accident. However, the simplest way to fulfill state requirements is to get car insurance.
Liability Auto Insurance Limits
All auto liability coverage plans have specific limits. The most common plans have separate limits for 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 I Need?
Generally, it’s a good idea to carry at least 100/300/100 in liability car insurance. Higher 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 your state’s required limits of 25/50/25. Each passenger claims $10,000 in medical bills, and the car has $5,000 in damage. The medical claims fit into your plan’s limits of $25,000 per person and $50,000 total per accident. Likewise, the damage claim is also covered.
Now, what if you bumped into the car a little harder? Each driver 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 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 car insurance 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 $50 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 liability car 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.
What’s Not Covered By Liability Auto Insurance
Liability car insurance is only one piece of the puzzle. It’s important, but it only protects you in certain situations. 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
You get the idea. Now, here are some other types of car insurance coverage you can add to protect yourself in those situations:
- Collision coverage: Covers damage to your car after an accident, no matter who was at fault
- Comprehensive car insurance: 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.
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 (855) 518-0148.
USAA: 5 Stars
USAA car insurance 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. Here’s what we like about USAA:
- Reputation: USAA has an A++ financial strength rating from AM Best, which means it can handle its claims obligations easily.
- Coverage: You can get all the standard options plus roadside assistance, gap insurance, rideshare coverage, rental coverage, and accident forgiveness.
- Cost and discounts: USAA is usually the cheapest option for many drivers. Its 12 discounts reward good drivers, active military members, customer loyalty, and more.
- Customer service: The company scored very high on J.D. Power’s 2019 U.S. Auto Claims Satisfaction Study and 2019 U.S. Insurance Shopping Study.
Geico: 4.5 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).
- Reputation: Geico has an A++ financial strength rating from AM Best and wrote $33 billion in premiums in 2018, according to the National Association of Insurance Commissioners.
- Coverage: Extra options include mechanical breakdown insurance, roadside assistance, classic car coverage, and rental coverage.
- Cost and discounts: Geico can compete with USAA for affordability. Discounts include good driver, good student, federal employee, military, multi-vehicle, multi-policy, and more.
- Customer service: Geico finished in fourth place on J.D. Power’s Auto Claims Satisfaction Study. It also has an A+ rating from the BBB.
Progressive: 4.5 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.
- Reputation: Progressive has an A+ financial strength rating from AM Best.
- Coverage: Extra options include roadside assistance, loan/lease payoff, custom parts value, rideshare coverage, and a deductible savings bank.
- Cost and discounts: Progressive is another affordable option for a number of drivers. Discounts include multi-policy, multi-car, homeowner, good student, safety features, Snapshot, autopay, accident forgiveness, and more.
- Customer service: Progressive has an A+ rating from the BBB.
FAQs About Liability Auto Insurance
Does liability car insurance cover my car if someone hits me?
No. Liability car insurance only comes into effect if you are the at-fault driver, and it covers other drivers and their property.
Do I need liability car insurance?
Yes, you do in most states. Unless you want to deposit $40,000 into a state bank account, you need liability car insurance. If you cause an accident without insurance, you can have your license and registration suspended. You may be charged hefty fines, as well. You’ll also have to pay to repair the other person’s vehicle and for their pain and suffering.
What is standard liability car insurance?
A common liability car insurance plan covers 100/300/100, or $100,000 in bodily injury per person, $300,000 in bodily injury per accident, and $100,000 in property damage. Liability car insurance is considered standard because 48 states require some form of it.
Does liability car insurance cover your own car?
Liability car insurance does not cover your own car, even if you caused the accident. That’s what collision coverage is for.
Whenever you shop for car insurance, we recommend getting quotes from multiple providers so you can compare coverage and rates. In addition to the insurance company you choose, factors such as your age, vehicle make and model, and driving history can affect your premium, so what’s best for your neighbor might not be best for you.
Use our tool below or call (855) 518-0148 to start comparing personalized car insurance quotes:
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