What is Liability Auto Insurance?

by Bianca Garrison - October 22, 2019

What is Liability Auto Insurance?

In most states, liability auto insurance is required to drive a vehicle. Liability insurance is an essential part of almost every car insurance policy.

Liability insurance helps pay for another person’s medical expenses and damages to their car should you cause a car accident. Auto liability insurance has two components: bodily injury liability and property damage liability.

What Does Liability Insurance Cover?

Bodily Injury Liability—if you are legally responsible for someone’s injuries, your liability insurance covers:

  • Pain and suffering
  • Medical expenses
  • Lost Wages
  • Legal fees

Property Damage Liability—if you are legally responsible for damaging someone’s property, your liability insurance covers:

  • Vehicles
  • Houses
  • Stores
  • Fences
  • Trees
  • And More

What Isn’t Covered Under Liability Car Insurance?

Liability car insurance does not cover your injuries or damage to your vehicle or property. If you want to make sure you are covered, consider adding comprehensive coverage and collision coverage to your car insurance policy.

How Much Liability Insurance Coverage Should You Have?

The minimum amount of liability insurance that you need is different for each state. When you purchase your liability insurance coverage, you will have to select limits—this is the most your insurance will pay out during a covered claim. Your limits are usually based on your state’s minimums or the premium amount that you can afford.

It is important to remember that your state’s minimums may not be enough to protect you in a car accident. If the damage you caused is more than the limits you selected, you will be responsible for the balance. For instance, if you purchase a 15/25/10 plan, then you get

$15,000 for bodily injury, per person

$25,000 for total bodily injury

$10,000 for property damage

So, if you purchase this plan, but cause $20,000 in property damage, you will be responsible for the other $10,000. Car insurance companies offer several different limit groups so that you can purchase the amount of liability coverage that works best for you.

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