Liability Coverage Car Insurance: 7 Key Facts You Need to Know

What is Liability Coverage Car Insurance?

Liability coverage is a type of car insurance that protects you from financial responsibility if you cause an accident that results in bodily injury or property damage to others. It does not cover damage to your own vehicle or injuries to yourself.

How Much Liability Coverage Do I Need?

The amount of liability coverage you need depends on a number of factors, including your state's minimum requirements, your assets, and your risk tolerance. In most states, the minimum required liability coverage is:

• Bodily injury liability: $25,000 per person/$50,000 per accident
• Property damage liability: $10,000 per accident

However, these minimums may not be enough to protect you from financial ruin if you cause a serious accident. Consider increasing your liability coverage to:

• Bodily injury liability: $100,000 per person/$300,000 per accident
• Property damage liability: $50,000 per accident

What Does Liability Coverage Cover?

Liability coverage typically covers the following:

• Bodily injury to others
• Property damage to others
• Medical expenses for others
• Legal fees

What Does Liability Coverage Not Cover?

Liability coverage does not cover the following:

• Damage to your own vehicle
• Injuries to yourself
• Punitive damages

How Much Does Liability Coverage Cost?

The cost of liability coverage varies depending on a number of factors, including your age, driving record, and the type of vehicle you drive. On average, liability coverage costs between $120 and $220 per year.

Common Mistakes to Avoid

• Driving without liability coverage. This is illegal in most states and can result in serious penalties.
• Not having enough liability coverage. If you cause an accident that results in more damage than your liability coverage, you will be financially responsible for the difference.
• Canceling your liability coverage. This can leave you exposed to financial risk if you cause an accident.

FAQs

• What is the difference between liability coverage and collision coverage? Collision coverage covers damage to your own vehicle, while liability coverage covers damage to others.
• What is uninsured/underinsured motorist coverage? Uninsured/underinsured motorist coverage protects you from financial loss if you are hit by an uninsured or underinsured driver.
• Can I get liability coverage without collision coverage? Yes, you can get liability coverage without collision coverage. However, if you finance your vehicle, your lender may require you to have collision coverage.
• What should I do if I am involved in an accident? If you are involved in an accident, you should:
  • Pull over to the side of the road.
  • Call the police.
  • Exchange information with the other driver(s).
  • Take pictures of the accident scene.
  • Contact your insurance company.