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Written by: Daniel Robinson, Written by: Daniel Robinson The Writer Daniel is a team writer for Guides and has written for a number of automotive news sites and marketing companies across the US, UK, and Australia, doing -specialize in the topics of auto finance and car care. Daniel is an authority on the Guides team on auto insurance, loans, warranty options, auto services and more.
Recommended Liability Coverage For Auto Insurance
Edited by: Rashawn Mitchner, Edited by: Rashawn Mitchner Managing Editor Rashawn Mitchner is a Guide team editor with over 10 years of experience covering personal finance and insurance topics.
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We at the Guides Team will explain everything you need to know about liability car insurance — what it does and doesn’t cover, how much it usually costs and recommendations for liability insurance providers.
If you’re in the market for new car insurance, we’ve also reviewed and ranked some of the best car insurance companies.
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The Guides Team is committed to providing reliable information to help you make the best decision possible about insuring your car. Because consumers trust us to provide objective and accurate information, we have developed a comprehensive rating system to form our rankings of the best auto insurance companies. We collect data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. After 800 hours of research, the result is an overall rating for each provider, with insurers scoring the most points topping the list.
What Is Liability Insurance?
Liability car insurance covers the cost of personal injuries and property damage after an accident where you are found to be at fault. With this coverage, your insurance company will pay the bill for other parties’ medical expenses and vehicle or other property repairs.
A typical liability auto insurance policy is described as having three numbers that represent the maximum amount (in thousands) that your insurer will pay after an accident. These three numbers represent, in order:
As an example, a 100/300/100 policy will pay up to $100,000 per person in bodily injury liability, $300,000 per accident in bodily injury liability and $100,000 per accident in property damage liability coverage. . If these minimums do not reach the total amount of damages resulting from your accident, you can be sued for the difference in civil court.
Liability car insurance does not cover damages to you or your car after an accident. If you want your insurer to cover these damages, you need collision and medical coverage. The exception is in no-fault states, where your liability policy will cover personal injury expenses.
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Liability coverage will not pay for property damages and medical bills for the other driver if you are not at fault.
Liability car insurance is required in most states, with minimum coverage requirements that vary by state. The only exceptions are New Hampshire and Virginia, where you are allowed to not exceed the insurance (for a fee) if you can prove that you have enough money to pay for the other party’s repairs from pocket if you cause an accident. This is called proving financial responsibility. Unless you have a lot of savings, this is not recommended.
Some states are known as no-fault insurance states. In these states, fault is not relevant in determining who should pay for bodily injury liability after an accident. Personal injury damages are covered by your own insurer, regardless of who is at fault in an accident.
No-fault states still require drivers to purchase property damage liability, and many also require bodily injury liability coverage. The following states have no-fault insurance laws:
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In Kentucky, New Jersey and Pennsylvania, drivers choose whether they want to operate under the no-fault or at-fault system. This choice is made when you purchase or renew your auto insurance policy.
Our rate estimates show that most drivers pay $627 per year or $52 per month for minimum liability car insurance coverage. It is cheaper than the cost of full coverage car insurance, which includes liability, collision and comprehensive coverage. Based on our estimates, the average cost of full coverage insurance is $2,008 per year or $167 per month.
Full coverage is more expensive because it not only protects you and your vehicle in the event of an accident but also your passengers and anyone else involved. Liability insurance is the minimum when it comes to insurance and only covers other people and their vehicles.
The table below illustrates how liability car insurance compares to full coverage insurance for the leading regional and national providers.
Liability & Pip Options
Most liability car insurance policies include a deductible. This is the amount you have to pay out of pocket before your auto insurance company will cover the damages. For example, if your deductible is $500 and you cause an accident that results in $2,000 worth of damages, the insurer will only cover $1,500 of that cost.
Based on our industry research, USAA offers the cheapest minimum liability coverage with an average annual quote of $387. That’s 62% cheaper than the national average of $627 per year. Auto-Owners, Erie Insurance and Geico are not far behind, also offering minimum liability coverage that is lower than the national average.
The cost of car insurance is not the same for every driver, even within the same state. When calculating your car insurance quote, insurance agents factor in details like your car, age, marital status and driving record. Other factors that affect car insurance premiums include your credit score (in most states), coverage limits and deductible choices.
In some cases, it may be advisable to purchase more than the state’s minimum amount of coverage for insurance. Remember that the cost of cars and medical care continues to rise. Policies that only meet your state’s minimum insurance requirements may not cover all the costs of even a minor accident.
How Much Car Insurance Do I Need?
If your liability car insurance policy does not cover the full amount of damages, you may be sued in civil court to make up the difference.
If you want more protection, there are other types of coverage you can buy. Experts usually recommend full coverage policies as long as the annual cost of full coverage is less than 10% of your vehicle’s value. When a vehicle is financed, the lender usually requires the owner to carry full coverage until the loan is paid off.
In addition to auto 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 offers less protection in the event of an accident. This auto insurance offers only 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 more protection for yourself, your passengers and your car.
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Finding the right insurer can be difficult. While cost is an important factor, also consider the quality of coverage, the reputation and customer service of different providers.
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 most recommended insurers, Travelers and Erie.
Travelers top our review of the best car insurance companies in the industry. Our cost research shows that Travelers typically offers some of the cheapest car insurance rates of any insurer. In part, this is due to the company’s many discount opportunities, including good driver discounts, good student discounts and multi-vehicle discounts.
Travelers offers liability car insurance coverage in every state, as well as every other standard type of car insurance — collision, comprehensive, medical payments, personal injury protection and uninsured/underinsured motorist coverage. The company also has a usage-based program called IntelliDrive®, which helps drivers get discounted rates and drive safely.
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USAA consistently offers some of the cheapest average estimated rates for drivers in many categories. However, USAA does not work for everyone. To qualify for a USAA auto insurance policy, you must be a member of the military or a veteran or have a family member who is a USAA member.
If you qualify, the insurer is definitely worth a look. You can buy any standard car insurance policy from USAA, as well as additional coverage such as mirror protection, guaranteed asset protection (gap) insurance and car replacement assistance (CRA).
If you have auto liability, it means that you have property damage and bodily injury insurance to pay for damages and injuries to another person caused by an accident in which you were at fault.
This type of insurance covers third party property damage and personal injuries during an accident. It does not cover your injuries and damages to personal property.
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There are more than three types of auto insurance coverage that you can purchase as a driver. These include liability, collision, comprehensive, medical payments, personal injury protection and underinsured/uninsured motorist coverage.
Because consumers trust us to provide objectivity and accuracy
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