What is Liability Car Insurance?
Liability car insurance coverage helps if you accidentally damage someone’s property or hurt them in a car crash where it’s your fault. Most states need you to have this coverage to drive legally.
Liability coverage has two parts: one for property damage and one for bodily injury.
- Property damage coverage helps pay for damage to someone else’s stuff.
- Bodily injury coverage helps pay for others who get hurt in an accident.
We can assist you in getting the right coverage you need.
Liability Insurance Coverage Limits
When you have liability insurance, the amount your insurance company will pay for a covered claim depends on the limits you choose. Each state has minimum limits that drivers must get for bodily injury and property damage, but you can choose to get more coverage. Your car insurance policy might show three limits for liability coverage:
- Property damage liability limit:
This is the most your insurance will pay to fix damage you cause to someone else’s stuff. It won’t go over the limit you set.
- Bodily injury liability limit per person:
This is the most your insurance will pay for each person hurt in an accident you cause.
- Bodily injury liability limit per accident:
This is the total your insurance will pay for all medical expenses in an accident you’re at fault for. Make sure to set a comfortable limit, as it may need to cover the medical costs of multiple people.
Insurance companies often bundle bodily injury and property damage limits together. For example, your policy might look like:
- 25/50/10 ($25,000 per person, $50,000 per accident for bodily injury, $10,000 for property damage) or
- 100/300/50 ($100,000 per person, $300,000 per accident for bodily injury, $50,000 for property damage)
Your options depend on the packages your insurer offers, and you might not be able to pick individual limits for bodily injury or property damage coverage.
What does auto liability insurance include?
Liability coverage helps with two important things: property damage and bodily injury.
- Property Damage:
- Fixes damage to someone else’s things like cars, yards, or poles caused by the accident.
- Also covers a rental car if the other person’s car is getting fixed.
- Takes care of the difference in value before and after the repairs (diminished value).
- Bodily Injury:
- Helps with injuries to others because of the accident.
- Takes care of medical bills, prescriptions, lost wages, and pain and suffering.
Different states have different rules about who can ask for money for injuries caused by the accident.
How much does liability car insurance cost?
A limit is the most money your insurance will pay for one event. For example, if your limit for fixing someone else’s stuff is $10,000, but you cause $15,000 in damage during an accident, you have to pay the extra $5,000.
If you only have the minimum required insurance and it’s not enough to cover all the costs in a bad accident you caused, you have to pay the extra money. It’s a good idea to choose the highest insurance limits you can afford so you’re well covered if something really bad happens.
The amount of insurance you need depends on your state’s rules and your own money situation. If you don’t have much money, you might have to stick to the minimum limits, but it can be risky. If you have a lot of valuable stuff, you might want to get higher limits for extra protection.
If you only have liability insurance, it covers other people, but not the damage to your own car. To protect your own car, you might also want to get collision and comprehensive coverages.
Why should you consider more – rather than less -- liability insurance?
Most states say you have to get basic insurance that covers the least amount required by the law. But it’s a good idea to get more coverage than what your state says you need.
Why? Let’s say you’re backing out of a parking space and accidentally hit a car driving behind you because you didn’t see it. The people in the other car get hurt a little, and it’s decided that you caused the accident.
Your insurance will pay for fixing the car you hit and for the medical bills of the people in the other car, including stuff like pain and suffering and lost wages.
But if the costs are more than what your insurance can pay, you might have to pay the extra money. If you can’t pay, it could lead to problems like losing part of your salary, having a claim on your belongings, or even having to go to court.
To really get how much insurance you should have, talk to someone at State Farm. They can help you figure out what’s right for you.
How much liability coverage do I need?
Choosing the lowest insurance amount might seem like a good way to save money, but it could be a problem if you’re in a big accident.
Having just the minimum insurance might end up costing you more than the small amount you saved.
Think about this: If you cause a serious accident, can you afford to pay extra money from your own pocket if the damages are more than what your insurance covers?
While small accidents may not be a big deal, what if it’s a major one with lots of cars and people? Could you pay for all the damages and medical bills for everyone involved? What if they decide to take you to court?
The good news is, it’s not too expensive to get more coverage than the minimum, especially if you’re a good driver!
When you’re looking at insurance options, compare different coverage amounts and prices. We’re here to help with any questions you have about insurance, from what’s required in your area to how much might be right for you.
About The Author
Andy Walker is a freelance content writer who specializes in writing for insurance and finance related niches. He has years of experience in this field and has written extensively on a variety of topics. Andy’s work is always highly polished and well-researched, ensuring that his clients are always happy with the results.