What is Liability Car Insurance?

Liability car insurance covers bodily injury and property damage

Liability insurance is the most basic form of auto insurance and is considered a social good as it covers others and does not cover you or your vehicle in an accident.

What Liability coverage does protect is other drivers from bodily injury or property damage you cause in an at-fault accident.

Liability coverage is required by almost every state in order to legally drive and register your vehicle.

Liability coverage comprises two key coverages of Bodily Injury and Property Damage.

Bodily injury liability car insurance covers injuries caused by an at-fault driver. Alongside physical injuries, bodily injury liability covers pain and suffering, loss of income, and other expenses for which you may be deemed liable after a vehicle collision.

Bodily injury liability insurance is mandatory coverage in every state except Florida and New Hampshire and helps to cover:

    • Medical bills caused by injuries
    • Emotional and physical pain or suffering
    • Wages lost or diminished earning capacity caused by accident

Property damage liability coverage pays for damage to another person’s property or any loss-of-use costs for which you’re found liable.

Property damage liability coverage helps to cover expenses like:

    • Vehicle damage and repairs
    • Repair of damaged structures
    • Debris removed as a result of an incident (trees, signage, etc.)

How to interpret Liability Coverages

When you see coverage amounts in a quote or policy, you normally see it in an abbreviated manner such as, 50/100/50 which is called Split Limit policies.  You can read that as

    • $50,000 in bodily injury liability coverage per person
    • $100,000 in bodily injury coverage per incident
    • $50,000 in property damage liability per incident

Split limit policies are the normal in the industry but there are also Per-Occurrence Limit policies.

    • A per-occurrence limit is the most your policy will pay per occurrence. For example, if you have a per-occurrence limit of $25,000, that is all the policy will pay after an at-fault accident for the other driver’s bodily injury and property damage.

A split limit policy is more recommended than a per-occurrence policy.

What liability insurance doesn't cover?

Liability car insurance does not cover any damage to your vehicle or bodily damage to you.  Coverage to your vehicle is made up of comprehensive and collision coverages and both are separate coverages you can elect to add to your car insurance policy.

What is not covered by liability insurance?

If you drive a vehicle you can’t afford to fix or replace yourself, consider adding Collision Coverage to protect your vehicle from damage by striking a fixed object (such as a wall or another vehicle).

Usually sold with collision coverage, Comprehensive Coverage protects your vehicle from occurrences not covered by collision coverage. This includes weather (flood, hail, lightning, etc.) theft, vandalism, or animal damage (hitting a deer).

Sometimes referred to UM/UIM, this coverage protects you and your vehicle from damage done by a driver without insurance (UM) – or someone with insufficient insurance (UIM).

Similar to  liability coverage, it is broken down into property damage and bodily injury coverage options.

This coverage can also apply if your car is damaged and/or you are injured by a hit-and-run driver.

Personal Injury Protection (PIP) provides assistance for medical expenses and work-loss coverage after an accident, independent of fault.

If you don’t have health insurance, PIP is worth considering. This insurance policy is commonly coupled with no-fault insurance.

How much liability insurance do I need?

The amount of liability coverage you carry depends on  2 main factors

    1. The laws in your state set the minimum required. Because car insurance is regulated at the state level, each state sets minimum policy limits for liability coverage.
    2. Your personal preference up to the maximum amount offered by the carrier.  Make sure you take into consideration that you are responsible for any remaining damage not covered by your insurance.
That second part of #2 above “you are responsible for any remaining damage not covered by your insurance” is the big one.  If you have assets and can’t or don’t want to be sued for the remaining damages, we suggest you choose a higher liability coverage limit.
    • As an example, if you have $10,000 in liability coverage and you run into someone crossing a crosswalk and their medical bills are $25,000, the insurance pays the first $10,000 less your deductible and you could be responsible for the remaining $15,000.
If you absolutely can’t afford higher coverages, there are companies that specialize in state minimum liability policies but many times, as a state minimum coverage customer, you are paying as much as others who have higher coverages.

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You can start the process online or reach out by phone 1-877-865-2111 to speak to one of our licensed agents as our in-house agency is licensed to write policies for many of the top insurance companies.