March 19, 2021

What you need to know about liability car insurance (2021)

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Liability car insurance is a type of auto coverage designed to cover the cost of damages after an accident that you cause. In most states, a liability insurance policy is required to legally drive on public roads.

This article will explain everything you need to know about liability car insurance — what it does and does not cover, how much it typically costs, and recommendations for liability insurance providers.

Our review team has researched and ranked the best car insurance companies on the market. If you’re ready to start comparing liability coverage rates from top providers in your area, use the free tool below.

In this article:

  • What does liability car insurance cover?

  • How much does liability insurance cost?

  • Do you need liability car insurance?

  • Our recommendations for liability insurance

  • Our methodology

What does liability car insurance cover?

Liability car insurance covers the cost of personal injuries and property damage after an accident for which you are found to be at fault. With this coverage, your insurance company will foot the bill for other parties’ medical expenses and vehicle or other property repairs.

A typical liability auto insurance policy is described with three numbers that represent the maximum amount (in thousands) your insurer will pay out after an accident. These three numbers represent:

  • Bodily injury (BI) liability per person: Bodily injury liability covers medical bills, lost wages, and pain and suffering expenses.

  • Bodily injury liability per accident: This is the maximum amount of bodily injury coverage paid out per accident.

  • Property damage (PD) liability per accident: Property damage liability covers vehicle damages, property damage, cleanup costs and court costs if you are sued.

As an example, a 100/300/100 policy would pay out up to $100,000 per person in bodily injury liability, $300,000 per accident in bodily injury liability and $100,000 per accident in property damage liability coverage. If these minimums do not meet the full amount of the damage that results from your accident, you could be sued for the difference in civil court.

Most liability car insurance policies include a deductible. This is the amount you must pay out of pocket before your car insurance company will cover damages. For example, if your deductible is $500 and you cause an accident that results in $2,000 worth of damages, the insurer will only cover $1,500 of that cost.

Liability auto insurance in no-fault states

Some states are what are known as no-fault insurance states. In these states, fault is not relevant in determining who must pay for bodily injury liability after an accident. Personal injury damages are covered by your own insurer, no matter who is at fault for an accident.

No-fault states still require drivers to purchase property damage liability, and many also require that you carry bodily injury liability coverage as well. The following states have no-fault insurance laws:

  • Florida

  • Hawaii

  • Kansas

  • Kentucky

  • Massachusetts

  • Michigan

  • Minnesota

  • New Jersey

  • New York

  • North Dakota

  • Pennsylvania

  • Utah

In Kentucky, New Jersey and Pennsylvania, drivers are able to choose if they want to operate under the no-fault or at-fault system. This selection is made when you purchase or renew your car insurance policy.

What liability car insurance does not cover

Liability car insurance does not cover damages to your own vehicle and person after an accident. If you want your insurer to cover these damages, you will need collision and medical coverage. The exception is no-fault states, in which your liability policy will cover personal injury expenses.

Liability coverage will not pay for property damage and medical bills for the other driver if you are not at fault.

How much does liability insurance cost?

According to the most recent insurance cost report issued by the National Association of Insurance Commissioners (NAIC), the average liability car insurance premium in the U.S. in 2017 was $611.12. This number can vary widely by state. For example, in North Dakota, the average liability premium was $303.66. In Florida, the liability premium average was $964.28.

The cost of car insurance is not the same for every driver, even within the same state. Details such as your vehicle, age, marital status and driving record will impact your rates. Other factors that affect car insurance premiums include your credit score, coverage limits and chosen deductible.

Do you need liability car insurance?

Liability car insurance coverage is required in most states. The only exceptions are New Hampshire and Virginia, where you are allowed to forgo insurance (for a fee) if you can prove you have enough money to pay other parties’ repairs out of pocket if you cause an accident. This is called proving financial responsibility. Unless you have substantial savings, this is not recommended.

The chart below shows the minimum liability limits by state, according to the Insurance Information Institute.

State

Minimum Liability Limits

Alabama

25/50/25

Alaska

50/100/25

Arizona

25/50/15

Arkansas

25/50/25

California

15/30/5

Colorado

25/50/15

Connecticut

25/50/25

Delaware

25/50/10

Washington, D.C.

25/50/10

Florida

$10,000 PD only

Georgia

25/50/25

Hawaii

20/40/10

Idaho

20/50/15

Illinois

25/50/20

Indiana

25/50/25

Iowa

20/40/15

Kansas

25/50/25

Kentucky

25/50/25

Louisiana

15/30/25

Maine

50/100/25

Maryland

30/60/15

Massachusetts

20/40/5

Michigan

20/40/10

Minnesota

30/60/10

Mississippi

25/50/25

Missouri

25/50/10

Montana

25/50/20

Nebraska

25/50/25

Nevada

25/50/20

New Hampshire

25/50/25

New Jersey

15/30/5

New Mexico

25/50/10

New York

25/50/10

North Carolina

30/60/25

North Dakota

25/50/25

Ohio

25/50/25

Oklahoma

25/50/25

Oregon

25/50/20

Pennsylvania

15/30/5

Rhode Island

25/50/25

South Carolina

25/50/25

South Dakota

25/50/25

Tennessee

25/50/15

Texas

30/60/25

Utah

25/65/15

Vermont

25/50/10

Virginia

25/50/20

Washington

25/50/10

West Virginia

25/50/25

Wisconsin

25/50/10

Wyoming

25/50/20

In some cases, it may be advisable to purchase more than the state minimum amount of coverage for insurance. Keep in mind that if your liability car insurance policy does not cover the full amount of damages, you can be sued in civil court to make up the difference.

Beyond your liability requirements, you may want to consider a full coverage auto insurance policy. This means purchasing collision and comprehensive coverage in addition to liability auto insurance. Speak with your insurance agent to best determine which auto insurance coverage you may need.

Our recommendations for liability insurance

Finding the right insurer can be difficult. While cost is an important factor, you’ll also want to consider the quality of coverage, reputation and customer service of different providers.

The only way to find the best provider for your needs is to shop around and compare offers. We recommend starting with two of our top recommended insurers, Geico and USAA. You can reach out for free, personalized auto insurance quotes from multiple companies at once by entering your ZIP Code below.

Geico: 9.1 out of 10

Geico took the top spot in our review of the industry’s best car insurance companies. It receives high marks from customers and scored above-average in every region in the J.D. Power 2020 U.S. Auto Insurance Satisfaction StudySM.

Our cost research has shown that Geico typically offers some of the cheapest car insurance rates of any insurer. In part, this is because of the company’s numerous discount opportunities, including a good driver discount, good student discount, multivehicle discount and more.

Geico offers liability car insurance coverage in every state, as well as every other standard type of automobile insurance — collision, comprehensive, medical payments, personal injury protection and uninsured/underinsured motorist coverage. It also has some specialty policy add-ons such as mechanical breakdown insurance and ride-share coverage.

USAA: 9.1 out of 10

While Geico has excellent customer service reviews, USAA actually ranked highest in every region in the J.D. Power Satisfaction Study. And, according to the NAIC, USAA accounted for only 0.76% of the insurance market’s customer complaints in 2019.

Rates with USAA are typically affordable. However, USAA is not available to everyone. To be eligible for an auto insurance policy with USAA, you must be a member of the military, a veteran or have a family member who is a USAA member. If you are eligible, the insurer is certainly worth a look. You can purchase any standard auto insurance policy from USAA, as well as additional coverage such as glass protection, guaranteed asset protection (GAP) and car replacement assistance (CRA).

Our methodology

Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.

Here are the factors our ratings take into account:

  • Reputation: Our research team considered market share, ratings from industry experts and years in business when giving this score.

  • Availability: Auto insurance companies with greater state availability and few eligibility requirements scored highest in this category.

  • Coverage: Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.

  • Cost: Average auto insurance rates and discount opportunities were both taken into consideration.

  • Customer Experience: This score is based on volume of complaints reported by the NAIC and customer satisfaction ratings reported by J.D. Power. We also considered the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.