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Liability car insurance

Liability kicks in for other people’s medical bills or car repairs if you cause an accident.

Liability car insurance covers you if you’re responsible for an accident and need to pay for damage from hitting another car, injuring a driver or passenger or crashing into other property like fencing or a pole. This protection also pays for your legal expenses if someone sues you for the accident — so it’s important that you buy enough liability insurance to cover these expenses and protect your finances.

How liability car insurance works

There are two types of liability car insurance coverage: bodily injury liability and property damage liability.

  • Bodily injury liability pays for costs if you injure another person in a car accident. It covers medical bills and lost wages caused by the accident.
  • Property damage liability pays for costs if you damage another person’s property in a car accident. That includes damage to cars, trees, fences or other objects.

When you’re buying car insurance, you’ll need to choose the amount of liability coverage you want, called your coverage limits.

On an online quote or your policy, liability coverage limits might look something like: 50/100/50. This means that insurance pays a maximum of $50,000 for each person’s medical bills, $100,000 total for medical bills per person and $50,000 for property damage, typically applied to the other driver’s car.

Split limit policy

While shopping for liability coverage, you may see an insurance policy expressed as 25/50/15 — or similar to the above example. When you see numbers expressed in this way, you’re looking at a split limit policy.

These numbers are just shorthand for how much your insurance will cover you for:

  • The first number is the individual payment limit per accident for bodily injury. The 25 in our example refers to $25,000. It’s how much your insurance will cover for each person’s bodily injury costs — other than yours. For example, if you injure one person in an accident and their medical bills are $20,000, you’re covered.
  • The second number is the overall payment limit per accident for bodily injury. The 50 refers to $50,000. It’s how much your insurance will cover for the total bodily injury costs in an accident — again, other than yours. For example, if you injure 5 people and their medical bills are $20,000 each, you’re on the hook for $100,000. In this case, your policy will cover $50,000, and you’ll need to pay the other $50,000 yourself.
  • The third number is the overall payment limit per accident for property damage. The 15 refers to $15,000. It’s how much your insurance will cover for the total cost of property damage in an accident. This doesn’t include your own vehicle — instead, you’ll need collision coverage for that. For example, if you ram into a barn and it costs $6,000 to repair it, your insurance will cover the expenses if you have a 25/50/15 split limit policy.

The three numbers change to create different policies. Your state most likely has policy minimums, but otherwise you’re free to choose the right mix for your own needs.

Combined single limit policy

A combined single limit policy offers one coverage limit.

Let’s say you take out $200,000 of combined single limit coverage. In the event of an accident, you can split this coverage between different types of damages.

For example, you’d be covered in the following instances:

  • One person’s medical bills totals $150,000, and there’s $30,000 in property damage.
  • The medical bills of four people totals $200,000.
  • Property damage that costs $180,000. You also need to pay for someone’s medical bill of $5,000.

All of the costs are $200,000 or less, so your combined single limit insurance will cover them.

How much liability coverage do I need?

You want to start with buying the amount of liability coverage that meets your state minimum requirements, which is often 25/50/25, though requirements are widely different between states. However, since states typically require a low amount of liability protection, you want to consider higher protection, such as 100/300/100.

That’s because paying for someone else’s medical bills and car repairs can stack up quickly, especially if there are multiple people or cars involved.

If you select the bare minimum liability limits, you’ll be left to pay the excess damage expenses out of pocket. Also, you could appear high-risk to insurance companies, since you’re passing on more responsibility. As a general rule, many experts recommend buying policies that at least cover the value of your assets.

What are the requirements for New Hampshire and Virginia?

If you live in New Hampshire, you’re not required to have auto insurance. However, you need to prove you can pay up if you cause bodily injury or property damage. The easiest way to do this, of course, is by purchasing insurance.

It’s not mandatory to have auto insurance in Virginia, either. But like in New Hampshire, you must prove you can pay for costs stemming from bodily injury or property damage. You can do that by either buying insurance or paying a fee to Virginia’s motor vehicles department.

Does liability coverage come with a deductible?

Liability coverage usually doesn’t come with a deductible. For example, if you hit someone else’s car and your insurance covers the cost of repairs, you won’t have to pay out of your pocket.

Cheapest liability-only car insurance policies

As a ballpark, expect liability car insurance coverage to cost between $1,000 and $2,000 a year. However, the overall cost of liability coverage will vary considerably depending on your age, where you live and your driving history, among other factors. While this option isn’t right for everyone, compare sample quotes to see if it could be a good fit for your budget.

CompanyAverage annual rateLearn more
Geico$394Read review
USAA$416Read review
Progressive$536Read review
Grange$557Read review
Mercury$564Read review
Kemper$615Read review
21st Century$651Read review
Allied$666Read review
Nationwide$666Read review
Allstate$693Read review
Liberty Mutual$709Read review
State Farm$726Read review
The Hartford$727Read review
Average$598Compare all reviews

What’s not covered by liability coverage?

While liability car insurance is required, you might need other types of coverage to be fully protected. Here are some things not included in liability insurance:

  • Damage to your car caused by a collision or otherwise. If you have a long commute or drive a newer vehicle, you might want collision and comprehensive coverage to protect you from pricier repair costs.
  • Medical bills. Personal injury protection can help with medical expenses or finances after a car crash.
  • Uninsured drivers. Underinsured coverage will protect you if someone can’t pay for your damages in a crash they caused.

Compare liability car insurance policies

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Bottom line

In all states but Virginia and New Hampshire, liability coverage is required for every driver. Your state will likely have coverage minimums, but consider purchasing higher coverage limits to protect your assets.

Find the best deal on liability coverage by comparing car insurance companies.

Frequently asked questions about liability coverage

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