What is liability auto insurance coverage?

Liability car insurance is required in most states and covers other parties' damages after an accident you cause.

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UPDATED: Aug 26, 2022

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Written By: Daniel WalkerReviewed By: Mathew B. SimsUPDATED: Aug 26, 2022Fact Checked

Things to Remember...

  • Liability coverage consists of bodily injury and property damage liability
  • Required liability amounts vary by state 
  • If accident costs exceed your liability policy limit, you must pay the rest out of pocket

All drivers must carry vehicle liability insurance to drive. If you cause an accident, liability car insurance pays for other parties’ damages and injuries. 

Minimum liability insurance amounts vary by state, so check your state’s laws and get a policy from one of the best companies to ensure you’re fully covered.

More: What is auto insurance?

To learn more about liability car insurance, read on. We’ll go over what liability insurance covers, how much coverage you need, and other important information about liability coverage.

What does liability auto insurance cover?

What is liability insurance coverage? Liability insurance protects you if you cause an accident that injures other people or damages their property. 

Liability insurance consists of two parts:

  • Bodily injury liability coverage. Bodily injury liability coverage pays for damages resulting from injuries to others if you cause an accident. Some common examples of injury damages include medical bills, lost wages, and funeral costs.
  • Property damage liability coverage. Property damage liability coverage pays for vehicle and property damages if you cause an accident.

More: What is a car insurance policyholder?

Liability insurance coverage usually covers you if you get sued after an accident for damages. However, liability coverage may not pay for an attorney or court fees if you failed to report the accident or there were serious injuries.

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What Liability Car Insurance Doesn’t Cover 

Liability insurance pays for others’ bills after an accident you cause, meaning there are several things it won’t cover regarding personal expenses. Take a look at what liability insurance won’t pay for below.

  • Any costs exceeding your policy limit. If the costs of paying for other parties’ injuries and property damages exceed your policy limits, you’ll have to pay the rest out of pocket. 
  • Your property damages. Liability insurance won’t pay for damages to your own vehicle or property in an accident you caused.
  • Your medical bills. Liability insurance won’t pay for your medical bills in an accident you caused.

Since liability insurance only pays for other drivers’ damages and injuries, you may consider the following coverages to ensure you’re fully protected. 

  • Collision coverage. Collision coverage pays for repairs to your vehicle if you hit another vehicle or object, such as a fence post.
  • Comprehensive coverage. Comprehensive coverage pays for repairs to your vehicle if you hit an animal or your car gets damaged by weather, falling objects, vandalism, or theft.
  • Personal injury protection or MedPay coverage. Personal injury protection and MedPay coverages pay you and your passenger’s medical bills if you get in an accident, regardless of fault.

More: Rental Car Reimbursement

It’s generally best to carry a full coverage insurance policy, including liability, collision, and comprehensive coverages. A full coverage policy ensures you don’t incur expensive bills after an accident.

Do I need to carry liability car insurance? 

Yes, in most states, you’ll need to carry the required liability insurance amounts for property damage and bodily injury liability. 

Some states allow you to post cash bonds or pay uninsured motorist fees if you opt out of a liability insurance policy. Though if you’re leasing a car in one of these states, you may still need to carry liability insurance if it’s in your contract.

More: Non-Owner Auto Insurance Basics

However, most states require all drivers to carry liability insurance. Drivers who don’t carry liability insurance face fines, suspended licenses or registrations, and increased insurance rates.

Minimum Liability Insurance Requirements by State 

Minimum liability insurance amounts depend on your state. The table below lists the liability insurance requirements by state.

Minimum Auto Insurance Requirements by State
StateInsurance requiredMinimum liability limits
AlabamaBI & PD Liab25/50/25
AlaskaBI & PD Liab50/100/25
ArizonaBI & PD Liab15/30/10
ArkansasBI & PD Liab, PIP25/50/25
CaliforniaBI & PD Liab15/30/5
ColoradoBI & PD Liab25/50/15
ConnecticutBI & PD Liab, UM, UIM25/50/20
DelawareBI & PD Liab, PIP25/50/10
District of ColumbiaBI & PD Liab, UM25/50/10
FloridaPD Liab, PIP10/20/10
GeorgiaBI & PD Liab25/50/25
HawaiiBI & PD Liab, PIP20/40/10
IdahoBI & PD Liab25/50/15
IllinoisBI & PD Liab, UM, UIM25/50/20
IndianaBI & PD Liab25/50/25
IowaBI & PD Liab20/40/15
KansesBI & PD Liab, PIP25/50/25
KentuckyBI & PD Liab, PIP, UM, UIM25/50/25
LouisianaBI & PD Liab15/30/25
MaineBI & PD Liab, UM, UIM, Medpay50/100/25
MarylandBI & PD Liab, PIP, UM, UIM30/60/15
MassachusettsBI & PD Liab, PIP20/40/5
MichiganBI & PD Liab, PIP20/40/10
MinnesotaBI &PD Liab, PIP, UM, UIM30/60/10
MississippiBI & PD Liab25/50/25
MissouriBI & PD Liab, UM25/50/25
MontanaBI & PD Liab25/50/20
NebraskaBI & PD Liab, UM, UIM25/50/25
NevadaBI & PD Liab25/50/20
New HampshireFR only25/50/25
New JerseyBI & PD Liab, PIP, UM, UIM15/30/5
New MexicoBI & PD Liab25/50/10
New YorkBI & PD Liab, PIP, UM, UIM25/50/10
North CarolinaBI & PD Liab, UM, UIM30/60/25
North DakotaBI & PD Liab, PIP, UM, UIM25/50/25
OhioBI & PD Liab25/50/25
OklahomaBI & PD Liab25/50/25
OregonBI & PD Liab, PIP, UM, UIM25/50/20
PennsylvaniaBI & PD Liab, PIP15/30/5
Rhode IslandBI & PD Liab25/50/25
South CarolinaBI & PD Liab, UM, UIM25/50/25
South DakotaBI & PD Liab, UM, UIM25/50/25
TennesseeBI & PD Liab25/50/15
TexasBI & PD Liab, PIP30/60/25
UtahBI & PD Liab, PIP25/65/15
VermontBI & PD Liab, UM, UIM25/50/10
VirginiaBI & PD Liab, UM, UIM25/50/20
WashingtonBI & PD Liab25/50/10
West VirginiaBI & PD Liab, UM, UIM25/50/25
WisconsinBI & PD Liab, UM, Medpay25/50/10
WyomingBI & PD Liab25/50/20
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More: What is an auto insurance policy number?

Some states requiring the highest minimum amount include Alaska, Maine, and North Carolina.

How much liability car insurance do I need? 

Determine your state’s liability requirements to know how much liability insurance you need. You can contact the Department of Motor Vehicles or speak to an insurance company in your area to learn the requirements.

More: What is the difference between an auto insurance company vs. a broker?

Once you know the minimum amount, consider how much you can pay out of pocket if you cause an accident. While it may seem convenient that your state’s minimum requirements are low and you won’t have to pay much for coverage, it could backfire if you’re in an accident exceeding your policy’s limits.

For example, suppose your state only requires you to carry $5,000 in property damage liability. If you damage more than $5,000 worth of someone’s property, you must pay the rest out of pocket. If you can’t pay, you could get sued for the remainder. 

So, we recommend you carry more than the state minimum liability unless you can pay high amounts out of pocket after an accident. However, there are ways to reduce auto insurance costs for expensive coverage, from shopping around to taking advantage of discounts.

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Cost of Liability Insurance 

Liability insurance costs depend on your driving record, vehicle, insurance company, location, and more. The best way to find the cheapest rates is by shopping around and comparing quotes from different insurance companies in your area.

However, the average liability car insurance rates from the top insurance companies can give you an idea of how much liability insurance might cost drivers.

Drivers can spend anywhere from a few hundred to almost a thousand on liability insurance. However, remember that these rates are for drivers with clean records. A ticket, DUI, or at-fault accident will raise liability insurance rates significantly. 

Shopping around for liability insurance online can help reduce your rates. 

The Final Word On Liability Car Insurance

Liability insurance is necessary, as you need it to drive legally in most states. If you cause an accident, liability insurance pays for the other parties' medical and property damage bills. 

However, carrying enough liability coverage is important so you won’t exceed your limit after an accident and pay out of pocket.

If you want to find a higher liability coverage level for a reasonable price, the best option is to shop around and compare quotes. Use our free quote comparison tool to discover which insurance companies in your area have the best liability insurance rates.

Frequently Asked Questions

What is liability insurance?

Liability coverage pays for other parties’ property damage and injuries if you cause the accident. Almost every state requires drivers to carry liability insurance.

Should drivers get liability-only insurance?

We don’t recommend getting liability-only car insurance unless you can pay for personal vehicle repairs out of pocket after an accident.

For example, people with older and cheaper vehicles may choose liability-only car insurance, as they wouldn’t suffer a huge financial loss if their car gets totaled or needs repairs.

What is supplemental liability insurance for rented cars?

When you rent a car, you must carry the state’s required minimum liability insurance on the vehicle. 

Most rental car companies offer the option to add supplemental liability insurance to increase the liability limits beyond the minimum. You’ll have to pay an additional fee, but you’ll be better protected if you cause an accident in a rental car.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

Full Bio →

Written by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

Full Bio →

Reviewed by Mathew B. Sims
Editor-in-Chief Mathew B. Sims

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