Liability car insurance is the most basic type of car insurance, designed to protect you financially if you’re at fault for an accident that results in damage to someone else’s property or injury to another person. Nearly every state requires a minimum amount of liability coverage.
It’s important to note that liability insurance does not cover your injuries or your own vehicle damage if you cause the accident. You will need to purchase additional types of car insurance for broader coverage.
What does liability car insurance cover?
There are two types of liability car insurance, and nearly every state requires that you carry both if you operate a vehicle: bodily injury liability insurance and property damage liability insurance.
Bodily injury liability covers costs related to injuries or death of another person because of an accident you caused (though it does not extend to members of your household who are passengers in your vehicle). More specifically, bodily car insurance covers:
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Medical bills, including ambulances, surgeries, and follow-up appointments
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Prescription medications
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Pain and suffering
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Lost wages
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Legal fees related to injuries or death you caused if you are sued
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Funeral expenses
Property damage liability covers costs related to damage to other people’s property because of an accident you caused. This most commonly refers to another driver’s vehicle but can apply to a wide range of property. Here’s a more detailed list of what’s covered by property damage insurance:
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Vehicle repair or replacement costs
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A rental vehicle while the driver’s vehicle is being assessed and repaired
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Repairs to fences, light posts, barriers, road signs, walls, or other private or public property you damaged in an accident
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Replacement of personal property, such as electronics or sports equipment inside a damaged vehicle
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Removal of damaged property, such as fallen trees or telephone poles
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Legal fees related to property damage you caused if you are sued
What doesn’t liability insurance cover?
Liability insurance provides coverage for people and objects outside of your own vehicle, as well as non-household members who are passengers in your vehicle. Liability insurance does not cover:Â
A full coverage auto insurance policy, which typically includes collision and comprehensive insurance, can help cover what is not included in your liability policy.
Who needs liability car insurance?
Nearly every driver needs to carry liability car insurance. Each state varies in its auto insurance requirements, but almost all require some level of liability coverage.
Notable exceptions are Florida and New Hampshire. By law, Florida residents are only required to carry property damage liability, not bodily injury. New Hampshire requires either liability coverage (both property and bodily injury) or valid proof of financial responsibility, meaning you’d be able to pay accident-related expenses out of pocket if you are at fault.
Still, for most drivers, it makes sense to carry both types of liability car insurance to be safe. Without it, drivers are left financially vulnerable in the event of serious damage or injuries.
How much liability insurance do I need?
How much liability insurance you are required to carry varies by state. However, the most common amount of basic liability coverage required is $25,000/$50,000/$25,000 (or 25/50/25).
Here’s how that breaks down:
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$25,000 in bodily injury coverage per person
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$50,000 in bodily injury coverage per accident
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$25,000 in property damage coverage per accident
This means, should you cause an accident, your liability insurance would cover up to $50,000 in bodily injury costs, with a max of $25,000 per injured person. It would also cover $25,000 in property damage. You’d be responsible for paying any costs exceeding those limits.
State-mandated limits like these are notably low. For instance, if you cause an accident that damages multiple luxury vehicles, each carrying multiple injured passengers, your liability coverage would likely be nowhere near enough to cover repairs and hospital bills for all the parties and vehicles involved.
That’s why many drivers choose higher limits for their liability coverage. Although higher-limit policies cost more, lower-limit policies pose a risk to your home, savings, and any other valuable assets, which can be seized to cover the costs for which you’re responsible.
For instance, some policies may let you go as high as $250,000/$500,000/$250,000. Again, choosing higher liability coverage limits will increase your insurance premium. But for many, that protection is worth the cost.
How to file a liability car insurance claim
When you are at fault for an accident, you should file a liability car insurance claim as soon as you can. Here’s how.
Gather information
If you are not severely injured and are able, exchange names and insurance information with other drivers. This information will all be important for your liability claim, as well as any other claims you may make (like if you have collision, comprehensive, and medical payments coverage).
Document the damage
Take photos and videos of damage to all involved vehicles and property. It might also be helpful to take a photo of the other driver’s insurance card and license plate.Â
File a police report
Assuming you and your loved ones don’t immediately need to seek medical treatment, return to your home or someplace safe where you can file a police report. You can likely complete a police report online. If not, you may need to do so in person or by mail.Â
Begin your insurance claim
Next, file your car insurance claim. Depending on your insurer, you may be able to file your claim online or via an app. However, you should always be able to call your insurer and speak with a representative who can walk you through the process.
From there, your insurance company will take over. Just make sure you keep records of every expense and conversation related to your claim, and respond quickly if your insurer reaches out for more information or with next steps.
