What is Liability Insurance?
If you live in the United States and are thinking of buying a car or have already bought one;
it is very important that you know what Liability Insurance is and what the specific requirements of this type of coverage are in your state, so you will avoid breaking the law.
Continue reading, we will explain it in detail soon.
Liability Insurance
Liability Insurance is civil liability insurance that offers coverage for injuries and damages suffered by other people and their property in accidents caused by you .
Liability insurance or liability coverage comes in two forms:
- Bodily Injury Liability Coverage
- Property Damage Liability Coverage
Read also: How to insure a car in New York?
Bodily injury liability insurance covers expenses related to physical injuries to other parties caused by your vehicle.
Property damage liability insurance pays for repairs to a victim’s property, including a car or home.
You already know what Liability is in the car insurance sector, let’s now see the most important aspects of this coverage;
- It does not cover any of your expenses in the event of an accident.
- It covers property damage and bodily injury that you cause to other people.
- Most states require drivers to have at least one Liability Insurance.
- To decide how much liability coverage to purchase, consider your assets and your driving record.
- If you have more assets, you should get Liability Insurance with more coverage to protect you in the event of a lawsuit.
- How does Liability Insurance work in car insurance companies in the United States?
- Typically, you’ll see liability coverage divided into three separate numbers that indicate your bodily injury and property damage liability limits .
For example, the minimum auto insurance for liability in Illinois is $25,000 / $50,000 / $20,000.
This means the following:
Bodily injury per person: $25,000 is the maximum amount your insurance company will pay for injuries per person.
Accidental Bodily Injury: $50,000 is the maximum amount your insurer will pay for accidental injuries.
Property Damage Per Accident: $20,000 is the maximum amount your insurer will pay for damage to someone else’s vehicle or property in the accident.
Consider the two scenarios below, assuming your liability limits are $25,000 per person, $50,000 per accident, and $20,000 for property damage.
EXAMPLE ONE: You hit another driver causing $20,000 in injuries and $15,000 in property damage. Your insurance must pay both amounts because all injuries and damages fall below your coverage limits.
EXAMPLE TWO: You are at fault in a car accident, but it is a more complicated situation because you injured the driver and two passengers.
Read also: Southampton: Easy Guide to Living and Working in Southampton
The three have $25,000 in injuries, for a total of $75,000. You might think you’re covered because you have $25,000 in bodily injury per person.
However, $50,000 is the most your insurer will pay per accident under your coverage. In other words, you will have to pay the remaining $25,000 out of your own pocket.
What does the Liability Coverage include?
Liability insurance covers injuries and property damage that the insured causes to other people in a car accident.
If you are at fault in an accident, the other driver will file a claim with your liability policy to cover his expenses.
Liability insurance can also pay legal fees if someone sues you after an accident for which you are responsible.
Liability Coverage includes:
- Medical expenses of others after accidents caused by the insured
- Damage to other people’s property, including the car, house or fence
- Legal fees if you are sued after causing an accident
What does the Liability Coverage not include?
When you are at fault in an accident, liability insurance coverage does not cover any damage to your property.
It also doesn’t pay your medical bills. So, while important, liability coverage isn’t the only type of insurance you should have.
To be better protected in the event of an accident, you will also need, at a minimum, collision coverage. Ideally, though, you should consider full coverage insurance.
Read also: How long does an accident claim last?
The minimum car insurance by state
In the following table you will find the minimum insurance that is required in each state for auto liability coverage.
Condition Minimal bodily injury per person Minimal bodily injury per accident Minimal property damage per accident
- Alabama 25K 50K 25K
- Alaska 50K 100K 25K
- Arizona 25K 50K 15K
- Arkansas 25K 50K 25K
- California 15K 30K 5K
- Colorado 25K 50K 15K
- Connecticut 20K 50K 25K
- Delaware 25K 50K 10K
- District of Columbia 25K 50K 10K
- Florida N/A N/A 10K
- Georgia 25K 50K 25K
- hawaii 20K 40K 10K
- Idaho 20K 50K 15K
- Illinois 25K 50K 20K
- Indiana 25K 50K 10K
- Iowa 20K 40K 15K
- Kansas 25K 50K 10K
- Kentucky 25K 50K 10K
- louisiana 15K 30K 25K
- Maine 50K 100K 25K
- Maryland 30K 60K 15K
- Massachusetts 20K 40K 5K
- Michigan 20K 40K 10K
- Minnesota 30K 60K 10K
- mississippi 25K 50K 25K
- Missouri 25K 50K 10K
- Mountain 25K 50K 10K
- Nebraska 25K 50K 25K
- Nevada 25K 50K 20K
- New Hampshire* 25K 50K 25K
- New Jersey 15K 30K 5K
- new Mexico 25K 50K 10K
- New York 25K 50K 10K
- North Carolina 30K 60K 25K
- North Dakota 25K 50K 25K
- Ohio 25K 50K 25K
- Oklahoma 25K 50K 25K
- Oregon 25K 50K 20K
- pennsylvania 15K 30K 5K
- Rhode Island 25K 50K 25K
- South Carolina 25K 50K 25K
- South Dakota 25K 50K 25K
- Tennessee 25K 50K 15K
- Texas 30K 60K 25K
- Utah 25K 65K 15K
- Vermont 25K 50K 10K
- Virginia** 25K 50K 20K
- Washington 25K 50K 10K
- West Virginia 25K 50K 25K
- Wisconsin 25K 50K 10K
- Wyoming 25K 50K 20K
* New Hampshire drivers are not required to carry liability insurance.
** Virginia drivers have the option of paying a $500 annual uninsured motor vehicle fee in lieu of obtaining liability insurance.
IMPORTANT: Although only the state’s minimum amount of coverage is required to be purchased, many people choose to purchase additional insurance.
Keep in mind that some states also require other types of insurance, along with liability coverage.
What is Liability Insurance: Frequently Asked Questions
What is Liability?
In the car insurance sector , Liability is a civil liability policy that covers the damages you cause to third parties in the event that they determine that you are responsible for the accident.
This type of auto policy is also known as Liability Coverage.
What is liability insurance?
Liability insurance protects you if you are legally responsible for injuries or property damage in a car accident.
So instead of paying out of pocket to cover someone else’s medical bills or fix their car, your insurance steps in to pay some or all of the expenses for the affected party.
Liability coverage is included with every auto insurance policy and is required in almost every state.
What does liability insurance cover?
If you are at fault in an accident, your liability limits cover damages and injuries you cause to others.
Read also: How long do I have to report a car accident?
Liability insurance covers:
- Damage to other cars
- Property damage (mailbox, house, street sign, railing, etc.)
- Injuries to other drivers/passengers/pedestrians
- Lawsuits and attorney/court fees
Do I need auto liability insurance?
Yes, liability coverage is required in almost all states. However, the amount of coverage you must have varies greatly from state to state.
What is the name of the insurance that covers everything?
The type of car insurance that provides you with the most protection in the United States is known as Full Cover . However, it is not a single policy but a combination of vehicle insurance policies.
