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Liability Car Insurance
What is Liability Insurance?
Car insurance and auto liability will always bubble down to the driver at fault –in some cases, there can be multiple. From there, the at-fault driver’s liability insurance protects you financially if you’re responsible for someone else’s injuries or property damage in an at-fault accident.
This is the primary reason why most states require some form of liability coverage. Paying for damages that you cause is a legal responsibility. The following is everything you need to know about liability car insurance and how much you should have by the Law.
How much does Liability Auto Insurance cost?
How much Liability car insurance will cost varies from person to person. The cost largely depends on different factors on which car you drive and how risky of a driver you are to insure.
One of the best things about liability car insurance is that companies price each auto insurance policy differently.
Even if you’re looking for minimum liability car insurance, it’s always recommended that you get a quote from at least three different vehicle insurers, both local and national. This is often key in finding reliable low cost auto insurance.
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What does Liability Vehicle insurance cover?
Liability car insurance is here to cover any damages and injuries you cause to other drivers in an accident where you are proven to be at fault. Damage and injuries are listed as the following on a liability coverage policy.
Bodily injury liability coverage, or BI, accounts for the injuries sustained by other drivers in an accident that you caused. Bodily injury liability coverage goes beyond paying basic medical bills and includes loss of income if the injured driver or passenger cannot work for the time being. Additional costs caused by what is described as pain and suffering are also included.
Property damage liability coverage, or PD, pays for fixing other drivers' cars when the insured driver is at-fault in a car accident. Property damage liability coverage will pay for these damages in addition to any damage caused in the accident, like highway equipment, street lights, and even business assets like outdoor restaurant tables.
There are three Liability coverage limits for cars, bodily injury limits per person, bodily injury limits per accident, and property damage limit per accident.
- Bodily injury per person limits refers to the amount your insurance policy will pay out for each person (including the driver) in the vehicle you were in a collision with.
- Bodily injury per accident limit refers to the amount your policy will pay for the whole accident. This includes any bystanders who are injured as a result of the collision.
- Property damage per accident limit is the amount that your policy will pay for any property that sustained damage due to the accident. This includes other vehicles, roadside assets, and any businesses or residences.
What will Liability auto insurance not cover?
Liability car insurance coverage exists only to cover damages and injuries you have caused to others in an auto accident and not the insured driver. That is why several add-on coverage options for your minimum coverage policy extend insurance coverage over to you in the event of an at-fault accident. These different types of coverage for your vehicle are the following.
- Personal injury protection, or PIP, is necessary if you want to have your injuries covered in the event you hit another driver. Any passengers in the vehicle with you will also be covered. Like bodily injury liability, it will also cover lost wages due to missing work or injuries.
- Collision coverage is one of two optional coverages that insure damage to your vehicle in a collision regardless of fault. Not only that, but collision insurance will also cover you anytime you crash into a stationary object like a tree, street light, and more.
- Comprehensive coverage is another additional coverage that insures damage to your vehicle, but only when it’s not in use. Just because you’re not driving doesn’t mean your vehicle can’t get damaged by weather or criminal activity. This physical damage coverage policy covers any damage, vandalism, or theft.
- Medical payments coverage, or MedPay, is a more expansive type of insurance policy meant to cover your injuries and medical costs in the event of an accident, regardless of fault. Health insurance copayments are also included with MedPay, along with additional medical expenses like ambulance transportation and funeral expenses.
How much are Liability insurance coverage limits?
Every state has minimum liability limits that all drivers must carry.
A notable example and case for most states is the 25/50/25 rule. This means that drivers usually carry basic coverages of at least $25,000 in bodily injury coverage per person, $50,000 in bodily injury per accident, and $25,000 in property damage coverage. This is the amount your insurer will pay out if you file a claim.
There are cases of some automobile insurers offering a combined single limit, or CSL, as opposed to the three previously mentioned categories. Those with high-valued cars and assets often opt for these liability coverage options.
Regardless, carrying much more than your state’s minimum liability limits is always a good idea, as they are often insufficient to cover damage and injuries on their own.
Which drivers need Liability auto insurance?
Liability car insurance coverage is required by nearly every state, even Washington, D.C. The one state where drivers are not required by law to purchase car insurance is New Hampshire.
But even then, the driver will still have to prove they can cover damages and injuries themselves. Specialized liability insurance is available and required for commercial drivers or those who use a vehicle exclusively for business purposes.
Pretty much every driver needs liability auto insurance. The only difference from state to state is the minimum required amount of auto insurance coverage. If you have any questions on how much specific auto insurance your car needs, you can contact your state’s DMV.
How Much Auto Liability Coverage Do You Need?
The auto insurance needs of yourself and your car are very personal things. As you can imagine, it’s rare to come across more than two drivers who pay the same amount for their cars insurance policy. How much you pay for car insurance depends on your risk, which considers your driving record, vehicle make and model, place of residence, and even more specific things like your credit score.
But, the one rule of thumb when getting a liability auto policy is to never buy only your state’s minimum insurance requirements. While you can drive legally, they are often nowhere near enough insurance to cover actual damages and injuries should an auto accident occur.
Another indicator of how much liability coverage you should have for your vehicle and other assets' value. High-value items and vehicles may require an umbrella policy extending their coverage.
There also is the chance you may have to get more than just liability coverage if you are leasing or financing your car.
Frequently Asked Questions
Does the Law require liability insurance coverage?
Liability insurance is the most important type of policy to have. One of the main reasons for this is that it’s legally required.
Not carrying at least your state’s minimum limits can result in legal penalties like license suspension, fines, and jail time for repeat offenders.
How much do Liability insurance policies cost?
The cost of car insurance varies from person to person since everyone has a different level of risk.
However, if we could give averages as to what people are paying for liability insurance coverage for their cars, the costs could be anywhere from $1,040 to $1,543 for the basic insurance coverage. It depends on where you live, the car you drive, and even the insurance company you are a policyholder with.
Are there discounts for Auto Liability insurance?
There are some discounts and savings you can qualify for when looking for car insurance coverage. The most popular insurance discount is the safe driving discount for those who haven’t been involved in an accident or filed a car insurance claim. Remember that the point of car insurance is not to use it, and you will be rewarded with lower rates for it.
When should I get Liability insurance?
It would help to have your liability insurance lined up and ready to go even before you get your car. It is illegal to drive as an uninsured motorist. You can see local and national car insurance companies or even get car insurance through the dealership.
Can liability insurance protect me from lawsuits?
Absolutely! Liability insurance is specifically designed to protect you from lawsuits in the event of a covered accident. Suppose you are found at fault for causing bodily injury or property damage to another person.
In that case, liability insurance will cover legal defense costs and any settlements or judgments that may arise from the lawsuit. This type of insurance provides financial protection and peace of mind, ensuring you are not personally responsible for paying out-of-pocket damages or legal expenses resulting from a lawsuit.
It is crucial to have liability insurance to safeguard yourself from potential legal consequences and financial burdens.
Does liability insurance cover medical expenses?
Yes, liability insurance does cover medical expenses. In the event of an accident where you are at fault, liability insurance helps pay for the bodily injuries sustained by the other party involved.
This includes their medical expenses, such as hospital bills, doctor visits, and rehabilitation costs. It is important to note that liability insurance typically limits insurance coverage for medical expenses, so it is advisable to review your policy to understand the specific details and limitations.
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