Margaret Huntley Last Updated On: June 27, 2023

What Is Liability Car Insurance?

Liability means responsibility, so liability car insurance is coverage that protects you against hefty out-of-pocket expenses and even financial devastation in the event you are responsible (i.e. found at fault) in an accident. To be deemed at fault, you must have taken some action—or inaction—that resulted in the incident. 

These actions/inactions can include, but are not limited to:

  • Impaired driving
  • Texting and driving
  • Speeding
  • Ignoring traffic warnings and signs

While liability insurance does not cover damages to you or your vehicle, it does cover damages to other people and their property. 

Let’s look into the standard coverages with liability auto insurance. 

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Table of Contents

What Does Liability Car Insurance Cover?

Liability car insurance is usually divided into a property liability portion and an injury portion. We’re going to look at them separately here. 

Property damage liability car insurance (PD) covers the property that’s damaged as a result of your being at-fault in an accident. This includes other people’s cars, fences and prize rose gardens, but also, property that was in the vehicle that was damaged by you. For example, someone has a new set of china in their trunk and you rear-end them, causing the new tableware to shatter. Your property liability car insurance will cover the cost of replacement. 

Bodily injury liability (BI) car insurance covers medical expenses, treatments, lost wages, and funeral arrangements that are a result of the accident caused by you. 

Liability auto insurance will also cover the costs of lawsuits in the event you are sued following an accident. 

Understanding State Minimum Liability Car Insurance

Each state has its own minimum required liability insurance, and while the most affordable liability auto insurance in the state minimum, it’s worth your while to consider a higher amount.  Remember, if the injuries and resulting medical bills are greater than the amount for which you are insured, the balance may be your personal responsibility. 

Many state minimums are $25,000 for property damage, but with the average cost of a vehicle sitting around $38,000, that $25,000 dollar figure is already $13,000 too low if you total another’s vehicle. And medical bills can easily exceed the $50,000 to $60,000 required as a minimum in personal injury coverage as well. 

You will see liability limits often expressed as 50/100 or 100/300, which would be $100,000 per incident and a maximum combined limit of $300,000 per incident in the later example.

Liability Car Insurance Is Legally Required, But You Have Options

In all states except New Hampshire, you are required to have liability car insurance if you own and operate a vehicle. It’s that simple. However, understanding how much liability car insurance you require and what, exactly, liability car insurance covers can be a bit more complicated. 

We’re going to make things as straightforward as possible here and now, so you can get the best liability auto insurance for you, at the most affordable rate. 

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How Much Liability Car Insurance Is Enough?

Perhaps the best answer to that is to answer this question: How much can you afford to pay out-of-pocket for damage and injuries to others? 

Do you own a home? Are you willing to lose it to satisfy a judgment or risk wage garnishment? In considering these questions, you can also get a broader look at factors like risk exposure that you face in the event of an accident. 

For instance, if you commute a long distance to work or drive your vehicle as part of your job, then you’re at greater risk of being involved in an accident. And, since no one is perfect, you have a greater risk of being at fault in an accident. 

Liability Car Insurance for Non-Vehicle Owners

Many people can benefit from liability coverage, even if they don’t own a vehicle. You can still be held responsible for damages, after all. 

In this case, the kind of liability car insurance you’d want would be called non-owner car insurance, and it is liability-only car insurance that comes in handy if you rent cars or borrow them from people who don’t live with you. If you reside in the same household, however, you should first consider being added to a family member’s policy. It’s easier and usually, much cheaper.

The Cost of Liability Car Insurance

Liability car insurance is one of the most expensive kinds of car insurance and the cost depends on how much coverage you want, as well as where you live, the make of your car, your driving record, your credit history, and other variables. 

So, it’s impossible to give you the exact cost of your liability insurance but we can speak in generalities. The average cost of life insurance is $1,134/year.

You can save money on your liability car insurance by bundling your home and auto insurance with any other policies you may have, and by maintaining a good driving record.

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How to Find the Best Liability Auto Insurance Provider?

All auto insurance companies offer auto liability insurance coverage but not all companies will provide coverage for drivers who have poor driving records or a conviction for a DWI or DUI. You may even be denied if you have a bad credit rating. 

But you can usually overcome these issues with some smart shopping. Start here, with us. We’ve curated a list of the top liability car insurance providers in the industry and we’ll match you with the best carrier for your needs and your budget. 


Yes, you do, in most states. The exception is New Hampshire, where you don’t legally need this coverage but if you decide to forgo it, you have to be able to prove you can pay for at-fault damages out-of-pocket.

No, it only covers other people and their property in the event of an at-fault accident. However, your liability car insurance may also cover legal fees should you be sued.

Auto liability insurance only covers other’s property losses and injuries. Full coverage is a term frequently used to mean that a policy includes collision and comprehensive as well as medical and uninsured or underinsured motorist coverage. Unlike liability, which only covers other people’s property and injury, the coverages that fall under full coverage also take care of the policy holder’s vehicle and person.


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