What Does Liability Insurance Cover

What is Liability Coverage?

Liability coverage covers damage to another person’s property and/or injuries caused by an accident in which you are at fault. Most states require this coverage in order for you to lawfully operate your vehicle.

  • Property damage and physical harm are the two aspects of liability coverage.
  • Damage to another person’s property is covered by property damage coverage.
  • Others wounded in an accident are compensated through bodily injury coverage.

Liability car insurance is a sort of motor coverage that pays for damages caused by you after an accident. A liability insurance coverage is essential in most states in order to lawfully drive on public highways.

This article will cover all you need to know about liability auto insurance, including what it covers and what it doesn’t, how much it typically costs and liability insurance provider suggestions.

The finest vehicle insurance providers on the market have been investigated and ranked by the Home Media reviews team. Use the free tool below to start comparing liability coverage costs from reputable providers in your region.

In this article, we’ll look at what liability auto insurance covers.


After an accident in which you are found to be at fault, liability car insurance covers the costs of personal injuries and property damage. Your insurance provider will cover the costs of other people’s medical expenditures as well as automobile or other property repairs if you have this coverage.

A typical liability vehicle insurance policy has three digits that represent the maximum amount (in thousands) that your insurer will payout in the event of an accident. These three figures stand for:

Liability for bodily injury (BI) per person: Medical bills, lost pay, and pain and suffering are all covered by bodily injury liability.

Per-accident bodily injury liability: This is the maximum amount of bodily injury coverage that can be paid out in a single accident.

Property damage liability (PD) per accident: If you are sued, property damage liability covers car damages, property damage, cleanup fees, and court costs.

A 100/300/100 insurance, for example, would pay up to $100,000 in bodily injury liability per person, $300,000 in bodily injury liability per accident, and $100,000 in property damage liability coverage per accident. If these minimums do not cover the full extent of the damage caused by your accident, you may be sued in civil court for the difference.

A deductible is usually included in liability automobile insurance coverage. This is the amount you must pay before your automobile insurance company would cover damages. For example, if your deductible is $500 and you cause a $2,000 damage accident, your insurance company will only reimburse $1,500 of the cost.

In No-fault States, Liability Auto Insurance is Required.

Some states are considered “no-fault” insurance states. In these states, culpability has no bearing on who is responsible for bodily damage liability following an accident. Your own insurer covers personal injury losses, regardless of who is at fault in an accident.

Even in no-fault states, drivers must acquire property damage liability insurance, and many additionally need bodily injury liability coverage. No-fault insurance laws are in effect in the following states:

  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • Pennsylvania
  • Utah

Drivers in Kentucky, New Jersey, and Pennsylvania have the option of operating under a no-fault or at-fault system. When you buy or renew your automobile insurance coverage, you can make this choice.

What isn’t covered by liability automobile insurance?

After an accident, liability auto insurance does not cover damages to your own vehicle or person. You’ll need collision and medical coverage if you want your insurance to reimburse these costs. No-fault states are an exception, as your liability policy will cover personal injury expenses.

If you are not at fault, liability coverage will not pay for the other driver’s property damage or medical expenditures.

What is the cost of liability insurance?

According to the National Association of Insurance Commissioners (NAIC) most current insurance cost study, the average liability vehicle insurance premium in the United States in 2017 was $611.12. This figure varies a lot from state to state. The average liability premium in North Dakota, for example, was $303.66. The average liability premium in Florida was $964.28.

Even within the same state, the cost of auto insurance is not the same for every driver. Your prices will be influenced by factors such as your car, age, marital status, and driving record. Your credit score, coverage limits, and deductible choice are all elements that influence your auto insurance costs.

Do you require automobile liability insurance?

In most states, liability car insurance is mandatory. New Hampshire and Virginia are the only states that allow you to forego insurance (for a price) if you can show you have enough money to pay for other people’s repairs out of pocket if you cause an accident. This is referred to as demonstrating financial responsibility. This is not advised unless you have a sizable savings account.

In some circumstances, purchasing more than the state’s minimum amount of insurance coverage may be advantageous. Remember that if your liability auto insurance policy does not cover the whole cost of the losses, you may be sued in civil court to make up the difference.

You may wish to explore a full coverage auto insurance policy in addition to your liability obligations. This necessitates the purchase of collision and comprehensive coverage in addition to liability coverage. To better identify the auto insurance coverage you may require, speak with your insurance representative.

Our liability insurance suggestions

It can be tough to find the correct insurance company. While price is crucial, you should also examine the coverage quality, reputation, and customer service of different providers.

Shopping around and comparing offers is the only way to locate the finest service for your needs. Starting with Geico and USAA, two of our top-rated insurers is a good place to start.

What is covered by motor liability insurance?

Property damage and physical injury coverage are included in liability coverage.

Damage to the other party’s property is covered by the property damage insurance. Vehicles, a yard, a light post, or other property may have been damaged as a result of the collision. Other items to consider are:

  • While the other person’s car is being fixed, a rental vehicle is provided.
  • The difference between the worth of the vehicle if it had never been damaged and the value after repairs have been performed is known as diminished value.

The term “bodily injury” refers to injuries received by a third party as a result of the event. This can include things like:

  • Prescriptions and medical bills
  • Wages that have been lost
  • Suffering and pain
  • Different states may have different rules about who can sue you for bodily injury.

What does liability insurance not cover in the event of a car accident?

Liability insurance helps pay for harm you cause to another person as a result of an accident. That is to say, it does not cover property damage or personal injury. Damages and injuries are covered by various insurance policies, such as:

  • Comprehensive Medical Payments in the Event of a Collision
  • Protection against personal injury


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