How Much Liability Car Insurance Do You Need?


WRITTEN BY: Julia Matseikovich

UPDATED: AUGUST 03, 2022 | 2 MIN READ

Liability is a fancy-sounding word, but it primarily means “responsibility.” There are different types of liability insurance for vehicle owners. Let’s dive into what liability car insurance is, what essential aspects it covers, and what you should consider when obtaining your liability car insurance.

What Does Liability Car Insurance Cover?

Liability car insurance coverage can vary. However, it pays to repair the damage you cause other people when you are at fault for an auto accident. 

There are two types of liability car insurance, and they are:

  • Bodily Injury Liability 
  • Property Damage Liability 

The majority of the United States will require that you obtain both types of coverage on your automobile insurance. Below you will learn the difference between each.

What does bodily injury liability insurance cover?

Bodily injury liability coverage is what is covered when someone else sustains an injury during an accident. It pays for medical expenses, lost wages if the person or people are out of work, prescriptions, and recovery treatments such as physical therapy if necessary.

If the accident is fatal, bodily injury liability is utilized for funeral expenses associated with the death. The coverage may also include pain and suffering on behalf of the passengers if they wish to collect payment.

Does bodily injury apply to the people in my vehicle?

Bodily injury insurance is intended and only pertains to the other vehicle’s passengers and their injuries during the accident you caused. It does not cover any damages to other passengers within your car. 

What does property damage liability insurance cover?

Property damage insurance is for any damage caused to the vehicle or personal property when you are at fault for an accident. For example, if you crash into someone’s fence, this coverage would pay for repairs to that fence, just as it would cover the other person’s vehicle if you hit them in an automobile accident.

This liability coverage could also include things found within the other person’s vehicle. Suppose you rear-ended another car, but the driver had thousands of equipment in their trunk. Your property damage insurance will cover the replacement of equipment and a new bumper. You can also use liability insurance to cover lawyer and court fees if you are sued. 

How Much Liability Coverage Do I Need?

Cheap liability car insurance coverage only pays the maximum amount specified by your policy. So, if any damage exceeds those limits, you will have to pay the rest yourself. 

The type of coverage should be customized to you and depends on your needs. First, you should speak to an insurance agent and obtain a liability car insurance quote. Then, you can compare auto insurance quotes from other insurance companies to find the most affordable policy and best coverage to suit you.

How much liability coverage am I required to have?

In most areas of the United States, you need at least $50,000 in bodily injury liability car insurance. You will also need at least $25,000 in property damage insurance. In addition, some states may also require uninsured motorist coverage. 

The minimum coverage for bodily injury car insurance varies by state and could be as little as $10,000 per person or $20,000 per accident. 

Should I increase my liability car insurance coverage?

Drivers should increase their liability levels as high as they can afford to go within their means and not stay with cheap car insurance coverage. Drivers who do not have enough liability coverage are still responsible for paying all costs. You might even find your assets seized or wages garnished.

What if I need even more liability coverage?

If you feel you need more liability car insurance coverage than you can get with your policy, there are options to obtain additional coverage. The more assets you own will contribute to the need for more auto liability insurance coverage. 

Consider if you own your home or have a substantial savings account. Then, when you’re at fault, an automobile accident could affect your finances if you are sued. 

What Doesn’t Liability Car Insurance Cover?

Damages that occur to you or other passengers within your vehicle are not covered by liability car insurance. It also does not cover any damage to your vehicle when you are at fault for an accident. You might consider other coverages within your auto insurance policy, such as collision and comprehensive insurance.

What does collision insurance coverage cover?

Collision coverage helps to repair or even replace your vehicle when it is damaged or totaled from an accident. Collision insurance works whether the accident was your fault or not.

What does comprehensive insurance coverage cover?

Comprehensive car insurance helps cover any damage to your car when a collision does not cause the accident. Other accidents that don’t involve a collision would include:

  • Theft from your vehicle
  • Vandalism to your vehicle, such as a broken window
  • Natural disasters to your cars, such as strong winds or hail
  • Hitting an animal

Collision and comprehensive car insurance do not cover personal injury or medical expenses. It would help if you talked to a licensed agent about medical payment coverage.

Can I add collision coverage only to my liability car insurance policy?

No. If you want to add collision coverage to your liability-only car insurance policy, you have to add comprehensive too.

How Much Cheaper is Liability Than Full-Coverage?

Full coverage includes liability, comprehensive, and collision coverages. On average, obtaining liability car insurance coverage is over 60% cheaper than full car insurance. 

Do I have to have full-coverage insurance?

If you have an older car or the ability to pay more out-of-pocket, you can save money and just obtain liability car insurance coverage. Collision and comprehensive coverage are not always necessary unless you lease or finance a car where your insurance company might require it. 

How do I know if I should decrease my insurance to liability only?

If the yearly cost of obtaining a full-coverage car insurance policy is more than 10% of your car’s value, you can decrease your coverage to liability only. At that point, the extra car insurance coverage has become too costly.

If I have liability insurance on one vehicle, can I have full-coverage insurance on my other vehicles?

Yes. When you have multiple vehicles on your policy, you can have full-coverage on one vehicle and liability-only on another. However, your liability limits have to be the same for all vehicles on the policy.

If you have more than one vehicle, you can have two separate policies with varying coverage. It makes more sense to do this, especially if you have a car that you will only be driving occasionally.

FAQs

What’s the difference between liability car insurance and comprehensive insurance?

Liability car insurance coverage pays for damage to others’ property and injuries, while comprehensive coverage repairs or replaces your car when damaged by something other than a collision.

Does my liability car insurance cover my car if I hit someone?

No. Your property or injuries are not covered by liability car insurance if you are at fault in an accident. It will only cover the other car’s damage and injuries sustained by the other driver and passengers.

What’s the difference between liability car insurance and full coverage?

Full-coverage car insurance includes the required liability and collision and comprehensive car insurance coverage. 

What are the three types of car insurance?

The three types of car insurance include: 

  1. Liability coverage, which protects you when you cause damage to others and their property,
  2. Collision car insurance coverage which covers your car if you hit something, and
  3. Comprehensive car insurance protects your car from damage or repairs from something other than a collision, including theft, vandalism, weather, or hitting an animal.

How can I find cheap liability car insurance?

To find the cheapest liability insurance coverage, compare rates from several companies. Make sure all of the quotes you receive have the same coverage, so you know which option is truly cheaper.

Find Liability Car Insurance

Liability car insurance is a customized auto policy that will help fit your needs and cover you when you are at fault during an accident. However, if you feel more coverage than just liability is necessary, you can opt for additional or full coverage with comprehensive and collision insurance.

Request a car insurance quote online today and compare companies to find the cheapest liability car insurance policy with the best coverage for your auto needs.