All registered vehicles are required to have car insurance in most states. While the amount of insurance required varies between states, there are certain mandatory coverages that stay the same in almost all cases. One such coverage is liability coverage. On average, liability-only insurance costs $565 annually. Your liability coverage covers the cost of damages incurred by another party as a result if you are in an accident at fault.
What is liability insurance?
Auto liability insurance is a special type. It covers injuries and damages you cause in an accident, as well as the costs of defending or settling lawsuits against you. There are two types of liability coverage.
- Bodily Injury Liability Covers the costs of injuries to other people that you cause when you are at-fault in an accident. This includes emergency care, ongoing medical costs, and lost wages.
- Property Damage Liability Coverage covers damage to property of other parties if you are responsible for an accident. Damage to vehicles is the most obvious example, but buildings and fences are also covered.
What is the coverage of liability car insurance? What is it not?
Liability insurance covers you for medical expenses and property damage if you are involved in an accident. It is required by most states. Liability insurance is designed to protect the at-fault driver and other people who are affected by an accident. It also provides compensation for any injuries or damages you may have caused.
Auto liability insurance covers the majority of the costs associated with your liability in an accident. However, there are some costs that are not covered. Intentional acts are not covered by liability insurance. The type of insurance will have additional costs.
What is the coverage for bodily injury liability?
Each claim is different, but bodily injury coverage generally covers the following:
- Medical emergencies, including ambulance and hospital care
- For ongoing medical expenses such as rehabilitation and doctor visits
- LOST LOCAL WORKERS
- The two most painful things in life are suffering and pain
- Funeral costs
- Similar legal expenses
Keep in mind, however, that the policy limits are not met. You will be responsible for any excess medical costs incurred by the injured party that exceeds the limits of your policy’s bodily injury coverage.
What is the coverage of property damage liability insurance?
In general, property damage coverage pays for:
- Vehicle damage
- Renting a replacement vehicle for repairs is at the expense of the other party
- Property damage to homes, buildings or businesses
- Mailboxes and fences damaged
- Revenue lost in business
- Similar legal expenses
Property damage liability coverage covers damage you cause to property owned by others. This coverage does not cover damage to your vehicle or to vehicles owned by family members who live in the same household. You will need collision insurance to cover vehicle repairs.
All of the above expenses are covered up to your policy limits. You may be responsible for any costs beyond your policy limit, even if liability insurance is in force.
What is the cost of liability insurance?
The average price for minimum auto insurance coverage in the United States is $565 per annum, while full coverage costs $1674 per annum. Car insurance costs can vary depending on where you live.
Insurance companies consider many factors when determining your insurance premium. These include:
- Age is a factor.
- Type of car that you drive
- Your driving record
- Your ZIP code
- You can choose the coverages and limits that you want to purchase
The price of liability-only auto insurance can vary depending on these factors. You also have the option to choose from a variety of coverage limits. Higher coverage limits will provide you with more coverage but will increase your premiums.
What amount of liability insurance do you need?
Every person has different insurance requirements, but there are some guidelines that can help you determine the right amount of coverage. Any charges that exceed the policy limit could be your responsibility. The more assets you have, the more liability insurance you might need. It is always a good idea to speak to an insurance professional or licensed agent to determine the right coverage for you.
Learn about the insurance laws in your state
The minimum coverage required depends on where you live and whether you are a tort or no-fault state. In a no-fault state, in addition to liability, property damage, and bodily injury coverage, a driver may also be required to carry personal injury protection, medical payments, and uninsured/underinsured motorist coverages.
To legally drive, you will need to have at least the minimum liability limits in your state. These limits can vary from one state to another. To see the requirements in your state, you can consult our state-specific auto insurance guide. You will see three numbers separated with a forward slash when you view required liability coverages.
- The minimum bodily injury liability per person for thousands is the first number.
- The second number represents the minimum bodily injury liability per accident that results in injuries to thousands of people.
- The third number represents the minimum property damage liability in thousands
25/50/25 Alabama means that if you are a resident of Alabama, you must have at least $25,000 in bodily injury liability per person, $50,000 per bodily injury per accident, and $25,000 property damage liability.
These are the minimum coverages required. Insurance professionals will recommend you have higher liability limits if possible.
Take a look at your financial situation
For those with tight budgets, car insurance may seem unnecessary. You can save money by paying just a few hundred dollars per year for the minimum coverage. If you are sued by someone for damages caused by a car accident, your insurance premium could be much higher than the cost of your policy. You could face penalties from the state and lose your license if you don’t have auto insurance.
You could be considered a high-risk customer if you cancel your insurance or lose coverage. This will lead to higher premiums. It may be worth looking for affordable insurance and discounts in order to keep your premiums low.
Consider your net worth
Your net worth can influence how much liability insurance you need. You may need more liability insurance if you have assets such as a house or car, but not too much debt. This will help protect your assets and keep them from being taken into a court of law. To provide additional liability coverage, you may want to look into an umbrella policy.
The best providers of liability insurance
Every driver has different insurance needs so the best car insurer will be different for each one. These companies are ranked by market share and offer discounts.
All of the listed providers offer discounts to lower the annual premium . Obtaining quotes from multiple providers is a great way to get the best car insurance policy. You can compare quotes from multiple providers to see which one offers you the best coverage at the most affordable price.
What is the difference in liability insurance and other types car insurance coverage?
Liability insurance covers medical expenses as well as damages to other drivers and passengers. It does not cover damage to your vehicle. When you purchase an auto insurance policy, there are many coverages available. These coverages include property damage liability and bodily injury coverages. You might also consider buying:
- Comprehensive coverage This covers damage to your vehicle due to weather, fire, theft or vandalism.
- Collision coverage: This covers damages to your vehicle that are caused by collisions or crashes with other vehicles and objects.
- Uninsured/underinsured motorists coverage: This pays for damages to your vehicle or property caused by a motorist with little to no insurance coverage.
- Roadside Assistance coverage: This covers the costs if your vehicle is towed or breaks down on the highway.
- Rental car coverage: This pays for the rental of a vehicle during an accident.
- Gap Insurance: This covers the remaining loan amount on a vehicle that has not been paid off.
There are many options for car insurance, and every insurance company offers its own set of coverages. A licensed agent can help you determine the coverages that are best for your situation.
Questions frequently asked
What coverage is right for car liability insurance?
There are many factors that determine which policy is right for you. You should also consider the minimum coverage limits in your state. However, you might want to consider higher coverage levels if this is possible. Talk to your financial advisor or insurance company to determine the right coverage.
Is liability insurance available to cover me if someone hits my car?
If another driver causes an injury, liability insurance will not cover you. Your damages should be covered by the insurance of the other driver. You can also purchase uninsured/underinsured motorist insurance in case you are hit by a driver who does not have sufficient liability insurance. You may be able pay your deductible with collision insurance and have your collision coverage cover the rest.
If I have liability insurance, will my personal assets be at risk?
Your personal assets may be at risk if you cause an accident where the costs of the other party exceed your liability insurance limit. You might consider purchasing a policy that covers your entire net worth. To get additional liability protection, you can buy umbrella insurance if you have reached a certain amount of liability insurance for your underlying auto and home policies.
What happens if an accident occurs and another driver files a claim for liability insurance?
In most cases, your insurance premiums will increase if you are found at fault for an accident. Keep your premiums low by adhering to traffic laws and avoiding driving habits that could cause accidents. Many insurance companies offer safe driving program which monitors your behavior and offers discounts for good driving habits.