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Liability car insurance provides coverage that will pay for medical care and vehicle repairs for others involved in a car accident that you caused or that was caused by another driver you allowed to use your car.
The purpose of liability insurance is to protect you and your family from unexpected costs arising from claims against you. While it's important you don't overpay for insurance, it's equally (if not more) important to make sure that you have enough coverage to help protect you from losses.
| What Liability Insurance Does and Doesn't Cover | |
|---|---|
| Covered | Not Covered |
| Damage to other drivers' vehicles | Damage to your vehicle |
| Bodily injury to other drivers | Bodily injury to the policyholder |
| Damage to other people's property | Bodily injury to your passengers |
| Legal fees if you're sued after an accident | Expenses exceeding your coverage limits |
| Lost wages of other drivers | Your lost wages |
| Funeral expenses of victims killed in an accident |
What Does Liability Car Insurance Cover?
Liability car insurance is designed to cover two categories of expenses related to any accident that's your responsibility, either because you're the driver at fault or because it was caused by someone you permitted to drive your car. Those expense categories are:
- Bodily injury: This pays for medical care for occupants or other cars involved in the accident and any bystanders hurt in an accident. Bodily injury coverage may also be used to cover victims' lost wages due to accident-related injury or your legal costs if you're sued by someone hurt in an accident for which you're responsible, or to pay funeral expenses for victims killed in such an accident.
- Property damage: Coverage for property damage can be used to pay for repairs to vehicles other than your own that are involved in a crash caused by you or another authorized driver of your vehicle. It can also be used to fix property broken in a crash, such as fences, mailboxes or buildings.
Note: Liability insurance is also called third-party insurance because it provides protection against claims from a party who isn't the policyholder (the "first party") or the insurance company (the "second party").
The purpose of liability insurance is to protect others from errors or negligence on the part of you or others driving your vehicle. It does not pay for repairs to your own vehicle in the event of a crash you cause (that's what collision coverage is for).
Liability coverage may or may not cover medical expenses if you or your passengers are injured in a crash that's your fault. Whether passengers are covered depends on where you live and the details of your insurance policy. States known as no-fault states require or rely on optional coverage known as personal injury protection (PIP) to cover the driver and passengers in your vehicle.
Learn More >> What Is the Difference Between PIP and Liability Coverage?
Liability Insurance Coverage Limits
Also note that liability insurance policies do not cover expenses that exceed their coverage limits. The minimum liability coverage required in most states—denoted 25/50/25—provides $25,000 per person in personal injury coverage or a total of $50,000 in personal injury coverage per accident, and $25,000 in property damage coverage per accident.
Some states require higher coverage levels, and many auto insurance companies offer optional higher coverage at additional cost. If you're responsible for an accident for which costs exceed your coverage amounts, injured parties and/or property owners (or their insurance companies) could sue you seeking full reimbursement of their costs.
Learn more >> What Does Car Insurance Cover?
Average Cost of a Car Accident
In 2022, the average auto liability claim for property damage was $5,313 while the average auto liability claim for bodily injury was $24,211, according to the Insurance Information Institute. The cost for injuries resulting from an accident varies based on the severity of the accident. Here's a breakdown of average car accident costs by severity:
| Average Cost of a Car Accident in 2022 | |
|---|---|
| Severity of Accident | Average Cost |
| Death | $1,869,000 |
| Disabling | $162,000 |
| Evident | $42,000 |
| Possible | $26,000 |
| No injury observed | $7,100 |
| Property damage only (cost per vehicle) | $6,100 |
Source: National Safety Council. An evident injury is a minor injury that is visible at the scene of a crash, but is not fatal or serious, while a possible injury is one that isn't visible.
As the cost of a car accident can range from thousands of dollars to hundreds or even millions, you might want to consider getting enhanced coverage. Umbrella insurance provides coverage if an accident causes liability damage that exceeds the limits of your regular auto insurance policy.
How Much Is Liability Car Insurance?
The average cost of a liability-only car insurance policy is about $80 to $150 per month, according to Progressive. Your actual costs may vary by state, by ZIP code, history of accidents and traffic violations, and even your credit scores.
Your car insurance policy may be higher if you buy coverage in addition to the minimum legal liability requirement. Inclusion of collision coverage, which pays for damage to your own car in the event of an accident you cause, and comprehensive coverage, which covers non-accident damage, will add to your premium (and is typically required by the lender if you're paying off a car loan).
Additional coverage for accidents caused by uninsured or uninsured drivers is also required in some states, and adds to your premium. The average annual cost of full coverage auto insurance, comprising liability, collision and comprehensive coverage, is $1,765, according to AAA.
Learn more >> Liability vs. Full Coverage Car Insurance
Do I Need Liability Car Insurance?
As of July 2024, every state but New Hampshire requires all car owners to carry liability coverage. New Hampshire requires individuals who waive coverage to have sufficient financial means to cover accident-related costs. (Virginia previously allowed drivers to waive liability coverage if they paid a $500 fee, but a law passed in 2023 requires proof of liability coverage for all state drivers effective July 1, 2024).
Licensed drivers who don't own cars but regularly drive borrowed, rental or rideshare vehicles may also require a type of liability coverage known as non-owner car insurance.
The extent of required coverage—the minimum dollar amounts the policy must pay toward property damage and personal injury claims—varies by state.
How to Get Liability Car Insurance
Obtaining car insurance is a straightforward process for most car owners, but before purchasing a policy, you should probably get quotes from several insurance providers to see which will offer you the lowest premiums.
Here are some basic steps to follow when seeking out the best deal you can get on an auto liability policy.
1. Gather Required Information
You'll need your driver's license number (and those of any other drivers you want covered under the policy, such as a spouse or children); the vehicle identification number (VIN) of any car you wish to insure, which can be found on the car's title or engraved on an ID plate on the dashboard of your car; and your name and address.
You may need to note any moving violations or accidents you or the other drivers have been cited for in the last three to five years. (Resist any temptation to omit these; doing so may yield a low quote, but the insurer will verify your driving record before issuing a policy and may increase the quoted rate or decline to cover you at all if unreported incidents are revealed.)
2. Choose Your Deductible and Coverage Limit
When selecting liability coverage, you'll also need to decide on your deductible and coverage limits. Most states have minimum coverage requirements; however, you're able to get more coverage and choose the deductible you want. Note that while a lower deductible means less out-of-pocket costs in the event of an accident, your policy will cost more, and vice versa.
3. Get Quotes From Insurers
You can find auto insurance quotes from many insurers online, and web searching on "auto insurance" and the name of your state can get you started. If you prefer to shop by phone, you can also use the phone numbers found at most providers' websites to review coverage options and costs with a company representative.
To avoid having to repeat your license number and VIN multiple times while comparing auto insurance rates, consider an online rate comparison tool that retrieves quotes from multiple providers. An independent insurance agent may also be able to gather quotes from multiple providers for you.
4. Select a Provider
Choose the policy that offers the best rates, submit your payment, and obtain insurance cards to keep in your vehicle as proof of insurance. Policies typically are in effect for six months at a time, although some providers issue 12-month policies. You may have the option of paying your premium in one lump sum or making multiple installment payments (at a somewhat higher total cost).
Note that you may need to buy additional types of insurance beyond liability, including:
- Collision
- Comprehensive
- Uninsured and underinsured motorist coverage
- Medical payments coverage or personal injury protection
The types of insurance and minimum coverage requirements you need to carry vary by state and whether you own, finance or lease your car.
Learn more >> How Much Car Insurance Do I Need?
How to Save Money on Liability Car Insurance
The most effective way to save money on liability car insurance is to shop around among multiple insurers. These tactics may yield additional savings:
- Bundle policies. Many insurers offer discounts to customers who purchase multiple policies, so getting a renters or homeowners insurance policy from the same company that insures your car can bring savings.
- Seek membership discounts. Civic clubs, veterans groups, trade unions and organizations such as AAA and AARP may have affiliations with auto insurers that can lead to lower rates. Ask a representative of the organization about applicable discounts.
- Consider a defensive driving course. Many insurance companies discount their rates for customers who attend qualified classes on defensive driving. The extent of the discount and the content of the course may depend on your state. Courses may be offered online or in person, and typically carry a fee of $50 or less.
- Work to improve your credit scores. Auto insurers in many states use credit-based insurance scores to help set their premiums. These are not the same scores lenders use to determine creditworthiness, but steps that can improve your generic credit scores also can boost insurance-related scores. Credit score improvement often takes months or years, so this method may not save you money on your current insurance rates, but long-term improvement in credit scores can help lower car insurance costs.
Learn more >> Top Car Insurance Discounts
The Bottom Line
Liability car insurance is a legal requirement for most car owners and drivers, and good liability coverage can pay for itself many times over if you or another driver of your car is at fault in an accident. If you are seeking auto liability coverage, Experian's free auto-insurance quote retrieval tool can help you compare rates from a number of top insurers at the same time.