What Is Liability Car Insurance Exactly?
We’ve Got the Answers to Your Liability Car Insurance Questions
Like your driver’s license, liability car insurance is one of the basic requirements for being a motorist. If you’re going to drive, you’re going to need it.
If you’re not averse to risk, own few assets, or can afford to pay tens of thousands of dollars to cover your own injuries and damages, a liability policy may be the only coverage you need. But for drivers who want more than the bare minimum coverage, liability insurance is the foundation for a more complete auto policy with multiple types of coverage.
Liability Car Insurance Coverage Defined
Liability car insurance by definition covers only the injuries or damage you cause to other people and property. Liability-only coverage does not cover your own injuries or property, so you would need to supplement it with additional insurance if you want to protect yourself.
The same rules apply for rental car liability insurance; the other people in the crash are covered, but you are not.
Liability-only car insurance is the most basic coverage you can purchase, but it is also the most essential. In most states, liability car insurance coverage is mandatory, and each state sets a minimum for how much coverage you’re required to buy.
Here’s how it works:
If your adjusters determine that you were at fault in an accident, your insurer will pay the costs of damages for the other party’s damaged car, minus the price of your car insurance deductible and up to your coverage limit. So if the damages amount to $10,000, and your deductible is $1,000, your insurance would cover $9,000.
If you want the best liability car insurance, consider a policy with a coverage limit that’s higher than what your state requires. Some states require coverage as low as $15,000 per person injured, or $30,000 per accident.
When requesting a liability car insurance quote, factor in how much of a deductible and monthly cost you could afford, and balance those rates with how much financial protection you think will be enough.
Remember, the nearest place to find a liability car insurance estimate is on your computer or phone, through our online auto quotes.
How to Get the Best Deal on Liability Car Insurance
How much liability car insurance costs depends on several factors. Here’s what to weigh in if you want affordable coverage:
- Comparison shop with quotes from multiple insurance providers
- Where you live impacts your rates since average liability car insurance costs vary by state and zip code
- Your driving record also factors into how much liability insurance is for your car
- If you are determined to find a policy that’s cheap, liability-only car insurance will be your least expensive option
- If you’re trying to find cheap coverage nearby, comparing quotes online may be your best bet
- Raising your deductible can help lower your rates
- Applying for discounts on auto insurance is another strategy, and there are several available, including good students, bundled policies, low annual mileage and antitheft devices
What Does Liability Car Insurance Cover?
The purpose of liability insurance is to provide the most basic protection if you are at fault in an accident. But it’s important to understand that this basic protection extends only to the other people involved, and not yourself.
First of all, liability insurance doesn’t cover:
- Your car if someone hits you. You would need a collision policy to pay for repairs. However, if the other driver has a liability policy, their insurance would pick up your tab.
- If your car is totaled and you only have liability insurance. Regardless of how extensive the damage is to your car, your own liability policy would not cover you, even in the event of a total loss. Again, you would need to rely on collision coverage, or the other driver’s liability insurance if that person were at fault.
- Rental cars. If you cause an accident while driving a rental car, liability coverage would not pay for any damage to the rental car you’re driving.
- Windshield replacement. If a rock or some other object strikes your windshield, you would need comprehensive coverage to pay for a replacement.
- Car theft. Only comprehensive coverage would pay for your car if it is stolen.
- Hit and run. If you are the victim of a hit and run, you would need collision or uninsured motorist coverage to pay for damages, and your own health insurance to pay for your injuries.
- Your own medical bills in an at fault accident.
- Hail damage and that from other natural disasters such as hurricanes, flooding, earthquakes, or wildfires. A comprehensive policy would cover you in these instances.
- Vandalism. Comprehensive coverage, not liability would pay for damages if your car is vandalized.
Now for what liability insurance does cover:
- Another person’s medical bills and damages if they are involved in an accident you cause.
- A hit and run accident in which you’re at fault. If you flee the scene of an accident you cause, but then either turn yourself in or the victim finds you, your liability insurance would cover the person you hit. However, you could face criminal charges and dramatically higher insurance rates.
- Injuries and damages you cause while driving a rental car. Even though liability coverage would not pay for your own expenses, it would still cover the costs of other people’s injuries and damages in a car accident you cause. If your want more liability coverage than your policy provides, you can purchase supplemental liability insurance from the car rental agency.
- When the other person’s liability policy covers you. If the other driver was at fault and has liability insurance, their policy would pay for your injuries or repairs.
Even with liability insurance, your policy covers only up to a certain limit, depending on how much coverage you’ve purchased. So take that into consideration when determining how much liability car insurance you need.
Liability Car Insurance vs. Other Car Insurance Types
Purchasing additional types of auto insurance can supplement your liability coverage to provide protection for your own injuries and damages.
Liability coverage is not the same as comprehensive or collision insurance. And it doesn’t matter how much liability coverage you have; it won’t cover you or your vehicle the way collision and comprehensive insurance do.
- Collision insurance covers your own car if you get into an accident, regardless of who was at fault. Versus collision, liability would not pay to repair your car. Collision coverage applies only if you’ve been in a wreck with another vehicle.
- Comprehensive coverage insures against damages to your car caused by events other than a collision. So if a tree falls on your car or if your car is stolen, a comprehensive policy would protect you. Versus a comprehensive policy, liability coverage does not cover any kind of damage to your car, whether they took place in a wreck or were caused by some other event.
- Personal injury protection (PIP) pays for your injuries and allows you to collect loss wages if you were in a wreck, whether or not you were at fault.
If you’re weighing liability vs. full coverage auto insurance, realize that the term “full coverage” can mean a lot of different things and is not a specific type of policy. Full coverage just means that your policy covers more than just liability and includes multiple coverage types.
A full coverage policy usually refers to a combination of comprehensive, collision and liability policies, but it may also include other types such as personal injury protection and uninsured motorist.
If you’re trying to figure out what liability car insurance you should get and how much you should have, your insurer will make the distinction between bodily liability and property liability coverage.
As long as you buy the minimum your state requires, you can raise and lower the amount of coverage you want in each of these categories.
Understanding Limits on Liability Car Insurance
Even with the coverage liability insurance offers, there are limits. For example, if you buy a 25/50/25 liability policy, that means your insurance will cover up to $25,000 in bodily injury liability for one person, up to $50,000 for the bodily injury of all persons involved in a car wreck you caused, and a maximum of $25,000 for property damage liability.
For any costs over and above those amounts, you would have to pay out of pocket. So consider your car insurance liability limits when purchasing your policy very carefully!