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Auto Insurance Liability Coverage Recommendations – Partner Content: This content is created by a Dow Jones business partner and is researched and written outside of the newsroom. Links in this article may earn us a commission. know more
Written by Daniel Robinson, Written by: By Daniel Robinson Author Daniel is a Group Writer for Guides and has written on auto finance and car care topics for a number of automotive news sites and marketing organizations in the US, UK and Australia. Daniel is a Guide Group authority on auto insurance, loans, warranty options, car services and more.
Auto Insurance Liability Coverage Recommendations
Edited by: Rashawn Michner Editing by: Rashawn Michner Managing Editor Rashawn Michner is a Guides team editor with over 10 years of experience covering personal finance and insurance topics.
Take A Look At Your Car Insurance
We at The Guide team explain everything you need to know about liability car insurance – what it does and doesn’t cover, how much it costs and recommendations for liability insurance providers.
If you’re in the market for new car insurance, we’ve reviewed some of the best car insurance companies.
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The Guide Team is committed to providing you with reliable information to help you make the best decision about insuring your vehicle. Because consumers trust us to provide objective and accurate information, we’ve created a comprehensive rating system to rank the best auto insurance companies. We’ve collected data from dozens of auto insurance providers to rank the companies on a variety of rating factors. After 800 hours of research, the final result was an overall ranking for each carrier, with insurers with the most points at the top of the list.
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Liability car insurance covers the cost of personal injuries and property damage after an accident in which you are found to be at fault. With this coverage, your insurance company will foot the bill for the other party’s medical expenses and vehicle or other property repairs.
A typical liability auto insurance policy is defined by three numbers that represent the maximum amount (in thousands) that your insurer will pay after an accident. These three numbers respectively indicate:
For example, a 100/300/100 policy pays a person up to $100,000 in bodily injury liability coverage, $300,000 in personal injury liability coverage, and $100,000 in property damage liability coverage in an accident. If these minimums do not meet the full amount of damages caused by your accident, you can be sued in civil court.
Liability car insurance does not cover damages to you or your vehicle after an accident. If you want your insurance to cover these damages, you need collision and medical coverage. The exception is a no-fault situation, in which your liability policy covers personal injury costs.
Auto Liability Coverage Explained
If you are not at fault, liability coverage will not pay for property damage and the other driver’s medical bills.
Liability auto insurance is required in most states, with minimum coverage requirements varying by state. The only exceptions are New Hampshire and Virginia, where you are allowed to drop your insurance (for a fee) if you prove you have enough money to pay for the other party’s repairs out of pocket if you cause an accident. This is called proof of financial responsibility. This is not recommended if you don’t have enough savings.
Some states are known as no-fault insurance states. In these states, fault is not necessary to determine who should pay personal injury liability after an accident. Personal injury damages are covered by your own insurer, regardless of who was at fault for the accident.
No-fault states require drivers to purchase property damage liability, and many require personal injury liability coverage. The following states have no-fault insurance laws:
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In Kentucky, New Jersey and Pennsylvania, drivers can choose whether they want to operate in a no-fault or no-fault system. This choice is made when you purchase or renew your auto insurance policy.
Our rate estimates show that most drivers pay $627 a year, or $52 a month, for limited liability auto insurance coverage. This is much cheaper than the cost of full auto insurance that includes liability, collision and comprehensive coverage. Based on our estimates, the average cost of full coverage is $2,008 per year, or $167 per month.
Full coverage is more expensive because it protects not only you and your vehicle, but your passengers and anyone else in the event of an accident. When it comes to insurance, liability insurance is the lowest and only covers other people and their vehicles.
The table below shows how liability car insurance compares to comprehensive coverage from top regional and national providers.
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Most liability auto insurance policies include a deductible. This is the amount you have to pay out of pocket before your car insurance company will cover damage. For example, if your deductible is $500 and you have an accident that causes $2,000 in damages, the insurer will only cover $1,500.
According to our industry research, USAA offers the cheapest liability coverage at an average of $387. That’s 62 percent cheaper than the average of $627 a year. Auto owners, Erie Insurance and Geco weren’t far behind, also offering minimum liability coverage below the national average.
Car insurance rates are not the same for every driver, even in the same state. When calculating your car insurance rates, insurance agents take into account details such as your vehicle, age, marital status and driving record. Other factors that affect auto insurance premiums include your credit score (in most states), coverage limits, and deductibles.
In some cases, it may be worth buying more than the state’s minimum amount for insurance coverage. Remember that the costs of vehicles and medical care have increased. Policies that only meet your state’s minimum insurance requirements won’t cover all costs of even a minor accident.
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If your liability auto insurance policy doesn’t cover the full amount of damages, you can sue in civil court to make up the difference.
If you need more protection, there are other types of coverage that you can buy. Experts recommend full coverage policies as long as the annual cost of full coverage is less than 10% of the value of your car. If a vehicle is financed, the lender usually requires the owner to take full coverage until the loan is paid off.
In addition to personal liability coverage, there are five other types of coverage that typically make up a full coverage policy:
While liability car insurance may be cheaper than full coverage car insurance, it provides less protection in the event of an accident. This car insurance only provides the minimum and only covers other drivers and their vehicles in an accident. It’s worth looking into other types of car insurance coverage to get extra protection for yourself, your passengers and your vehicle.
Liability Vs Full Coverage Car Insurance: Which Is Better?
Finding the right insurance can be difficult. While cost is an important factor, consider the quality of coverage, the reputation of various providers, and customer service.
The only way to find the best provider for your needs is to shop around and compare offers. We recommend starting with two of our top recommended insurers, Travelers and Erie.
In the review of the best car insurance companies in the industry, Travelers took the highest place. Our cost research shows that Travelers typically offers the cheapest car insurance rates of any insurer. In part, this is due to the company’s many discount opportunities, including a great driver discount, a great student discount and a multi-vehicle discount.
Travelers offers liability auto insurance coverage in every state, as well as every type of standard auto insurance – collision, comprehensive, medical bills, personal injury protection, and uninsured/underinsured motorist coverage. The company has a usage-based program called IntelliDrive® that helps drivers get discounts and drive safer.
General Liability Insurance Cost: 2023 Customer Prices
USAA consistently provides average rate estimates that are very reasonable for drivers in certain categories. However, USAA is not available to everyone. To qualify for an auto insurance policy with USAA, you must be a member of the military or a veteran or have a family member who is a member of USAA.
If you qualify, the insurer is definitely worth looking into. You can purchase any standard auto insurance policy from USAA, as well as additional coverage such as windshield protection, guaranteed asset protection (gap) insurance, and auto replacement assistance (CRA).
When you have car liability, it means that you have property damage and personal injury insurance to pay for injuries and damages to someone else in the event of an at-fault accident.
This type of insurance covers third party property damage and personal injuries in the event of an accident. It does not cover your injuries and personal property damage.
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There are more than three types of car insurance coverage that you can purchase as a driver. These include liability, collision, comprehensive, medical bills, personal injury protection and uninsured/underinsured motorist coverage.
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