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Liability Car Insurance: What To Know (Guide)

If you are at fault, liability car insurance pays the cost of the other party’s property damages. It also covers bodily injuries in most states.

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09/11/2023 05:14 PM

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Most states require drivers to have liability coverage. In this guide, our research team will explain what liability car insurance covers and how much it costs on average. We’ll also provide recommendations for liability insurance providers.

When shopping for auto coverage, it’s best to compare car insurance quotes from several providers. We’ve researched the best car insurance companies to help get you started.

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What Is Liability Car Insurance?

If you’re involved in a car accident and found to be at fault, your liability insurance will cover the costs of property damages for the other party. In most states, your liability coverage will also handle any medical bills that result from their injuries.

What Does Liability Insurance Cover?

You’ll typically see a liability insurance policy described by three numbers, like 100/300/50. These numbers represent the maximum amount your insurance company will pay out after an accident (in thousands). The numbers break down as follows:

  • Bodily injury (BI) liability per person: Bodily injury liability insurance covers medical expenses, lost wages, and costs associated with pain and suffering. In a 100/300/50 policy, the insurer will pay out a maximum of $100,000 to a single person after an accident.
  • Bodily injury liability per accident: This refers to the second number in the series, and it’s the maximum amount of bodily injury coverage your insurer will pay out per accident. In a 100/300/50 policy, your insurer will pay out a maximum of $300,000.
  • Property damage (PD) liability per accident: This covers costs associated with repairs, replacements, and cleanup services for motor vehicles and property damaged in an accident. It can also pay for court costs if you’re sued. In a 100/300/50 policy, the insurer will pay out a maximum of $50,000 per accident.

What Does Liability Car Insurance Not Cover?

Your liability car insurance doesn’t cover damage to your vehicle. It also doesn’t cover your medical expenses. To have these covered, you’ll need to purchase collision insurance and either medical payments coverage (MedPay) or personal injury protection (PIP). If you live in a no-fault state, PIP will pay for your personal injury costs.

If you’re not at fault for the car accident, liability insurance coverage won’t pay for the other party’s property damage or medical bills.

Should I Carry Liability Car Insurance?

Liability coverage is required by law in most of the country, though minimum insurance requirements differ by state. New Hampshire and Virginia don’t require car insurance as long as you’re able to prove you can financially cover other parties’ repair costs if you cause an accident. Unless you have a sizable amount of savings and a high income, we don’t recommend opting out of liability car insurance.

Liability Limits By State

The following table shows the minimum liability limits by state according to the most recent data collected by the Insurance Information Institute:

StateMinimum Liability Limits
Washington, D.C.25/50/10
Florida$10,000 PD only
New Hampshire25/50/25*
New Jersey15/30/5
New Mexico25/50/10
New York25/50/10
North Carolina30/60/25
North Dakota25/50/25
Rhode Island25/50/25
South Carolina25/50/25
South Dakota25/50/25
Virginia25/50/20 for policies before 1/1/22 or 30/60/20 for policies on or after 1/1/22*
West Virginia25/50/25

*Minimum requirements if drivers opt for liability coverage or can’t prove to the state that they can pay for damages out of pocket in an at-fault accident.

No-Fault Liability Insurance

Twelve states have “no-fault” insurance laws, which means fault isn’t considered when determining who pays for bodily injury after a car accident. In a no-fault state, if you get into an accident where the other driver is at fault, you’ll file a claim with your insurer to have your injury expenses covered. This is why PIP is often called “no-fault insurance.”

You still must purchase property damage liability coverage to legally drive in no-fault states. Some no-fault states may require bodily injury liability coverage as well.

Below is a list of all no-fault states:

MassachusettsMichiganMinnesotaNew Jersey
New YorkNorth DakotaPennsylvaniaUtah

Though Kentucky, New Jersey, and Pennsylvania are considered no-fault states, drivers have the option to operate under the no-fault system or the at-fault system. Drivers choose their preferred option when  purchasing or renewing their car insurance policies.

How Much Does Liability Insurance Cost?

By our estimates, drivers pay an average of $635 per year or about $53 a month for minimum auto liability insurance. Full-coverage car insurance, which generally includes collision and comprehensive coverage, is much more expensive. Drivers pay an average of $1,730 per year or about $144 per month for full coverage.

Liability Car Insurance Rates

Below is a table showing how the average cost of full coverage compares to the average cost of minimum liability coverage from 10 of the country’s largest car insurance companies.

CompanyAverage Annual Full Coverage EstimateAverage Annual Minimum Liability Estimate
Auto-Owners Insurance$1,337$349
State Farm$1,481$543
American Family Insurance$1,537$685

What Is The Cheapest Liability Car Insurance?

Our research data found that USAA offers the cheapest minimum liability coverage on average, costing 3 annually–well below the national average. Auto-Owners Insurance, Erie Insurance, and four other top brands shown here all offer minimum liability insurance below the national average as well.

Cheapest Liability Car Insurance

Here are the major car insurance providers that offer the cheapest minimum liability coverage on average:

Cheapest Minimum Liability CompanyAnnual Average EstimateMonthly Average Estimate
Auto-Owners Insurance$349$29
Erie Insurance$459$38
Country Financial$467$39
State Farm$543$45
American Family Insurance$685$57

Liability Car Insurance Deductible

If you only carry your state’s minimum liability insurance, you won’t have a deductible. If you’re at fault for an accident, your insurance company pays the other party and you pay nothing out of pocket. If you have any additional coverage in your auto insurance policy, like collision or comprehensive, you’ll have a deductible. Deductibles for those coverages are generally $500 or $1,000.

Factors That Affect The Cost Of Car Insurance

To get a quote from an insurance agent or an insurer’s online quote tool, you’ll have to provide certain information that helps determine your estimate. Each car insurance quote is specific to the individual driver. These factors include:

  • Your age
  • Vehicle type and age
  • Location
  • Driving record
  • Credit history
  • Gender on driver’s license
  • Marital status
Icons showing seven factors that affect the cost of car insurance

Liability Auto Insurance: Conclusion

Liability insurance is much cheaper than a full-coverage car insurance policy, but it doesn’t protect you as much in the event of a car accident. Auto liability coverage will pay for damages to another person’s vehicle or property if you’re found to have caused the collision.

But if you want extra protection for your vehicle, yourself, and your passengers, it’s worth looking into other types of coverage. Some of these coverage types may be required in your state, and lenders may require some of them if your car is leased or financed. In addition to auto liability coverage, a full-coverage policy typically includes:

  • Collision insurance: This coverage pays for damage to your vehicle and other personal property no matter who’s at fault for an accident. 
  • Comprehensive insurance: This coverage pays for damage to your vehicle resulting from non-collision incidents such as vandalism, theft, or natural disasters.
  • Uninsured motorist/underinsured motorist insurance: If you get into an accident with a driver who doesn’t have enough insurance coverage–or any at all–and they’re deemed at fault, underinsured or uninsured motorist coverage can help cover costs for damage to your vehicle.
  • Personal injury protection (PIP): Personal injury protection will pay your medical bills and lost wages resulting from an accident no matter who’s at fault.
  • Medical payments coverage (MedPay): Often a more affordable alternative to PIP, MedPay covers medical expenses but not lost wages.

Our Recommendations For Liability Car Insurance

When you’re shopping for car insurance, it’s important to consider a provider’s reputation and services before making a decision. We recommend sourcing quotes from several of the top insurance companies on the market, starting with Geico and Progressive.

Geico: Best For Discounts

As the second-largest car insurance provider in the country, Geico is known for its low rates and high policy limits. In addition to its car insurance coverage, the provider offers homeowners insurance, RV insurance, boat insurance, life insurance, and more. 

Geico also offers a wide variety of discounts, some of which can cut your bill by up to 25 percent. The company holds an A+ rating from the Better Business Bureau and an A++ financial strength rating from AM Best.

Discover more in our full Geico review.

Progressive: Best Usage-Based Insurance

Progressive has become one of the largest insurers in the country thanks to its many insurance products and highly rated mobile app. The provider is a good choice for high-risk drivers, offering discounts through its usage-based insurance program, Snapshot®. Progressive holds an A+ financial strength rating from AM Best.

Learn more in our full Progressive review.

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Liability Car Insurance: FAQ

What are the three types of car insurance?

The three main types of car insurance that typically make up a full-coverage policy are liability insurance, collision insurance, and comprehensive insurance. Liability insurance pays for damages and injuries to the other driver in an accident where you’re at fault. Collision coverage pays for your car’s damages in an accident. Comprehensive car insurance covers damages from non-collision incidents like natural disasters and theft.

Is liability insurance different from car insurance?

Liability coverage is a kind of car insurance that covers damages to another party’s vehicle or property if you’re found to be at fault for a car accident. In most states, liability coverage also pays for bodily injuries to the other driver.

Is liability insurance required?

Forty-eight states require liability insurance for their residents to legally drive. New Hampshire and Virginia are the only two states that don’t require drivers to have auto insurance.

What is full-coverage insurance?

Full-coverage insurance generally includes liability insurance, collision insurance, and comprehensive insurance. Full-coverage policies may also include uninsured motorist insurance and PIP or MedPay.

How We Rate Insurers

Our review process aims to deliver consistent and unbiased assessments of car insurance providers. While there are multiple qualities that make a car insurance company successful, our review team focuses on those we believe are the most important for consumers:

  • Cost: Cost can be difficult to compare between insurers because so many factors impact annual premiums. The cheapest insurer for one driver may not be the cheapest for another. To determine our cost score, we look at insurance rate estimates generated by Quadrant Information Services, discount opportunities, and consumer reports.
  • Coverage: To determine our coverage score, we look at the number of coverage options available as well as coverage limits and deductible options. Our ratings also take into account additional services and benefits like roadside assistance.
  • Reliability: It’s important that an auto insurer is able to meet its claims obligations. Companies with a strong financial strength rating from AM Best score best in this category. Established insurers with a long history of reliable service also receive positive marks.
  • Service: We comb through customer reviews on sites like the Better Business Bureau (BBB) to learn about customer experiences. Insurers with a low volume of complaints score well in this area. We also consider the claims process, giving higher ratings to car insurance providers that offer easy-to-use claims apps.

*Data accurate at time of publication.