car accidents are expensive, and costs can run into the tens and sometimes hundreds of thousands of dollars. In a worst-case scenario, going without enough liability coverage could potentially bankrupt you if you ’ re sued and forced to pay for damages. That ’ second why it ’ sulfur authoritative to understand how indebtedness coverage works and how much coverage you need when buy car indemnity — you don ’ triiodothyronine want to be over-insured but you besides don ’ thymine want to be underinsured in the consequence of an accident. Key Takeaways
- Liability insurance is one of the most crucial components of car indemnity. Every state that mandates car insurance requires drivers to have a minimal come of liability coverage
- It ’ s a beneficial theme to buy more liability indemnity than just your submit ’ second minimum, so you ’ rhenium not on the hook for paying tens of thousands of dollars out of pocket after an accident
- If person borrows your car, your indebtedness coverage besides extends to them. If they get into an accident while driving your car, your indebtedness insurance would cover wrong they caused
- If person borrows your cable car, your liability coverage besides extends to them, then if they get into an accident while driving your car, your indebtedness policy would cover damage they caused
What does liability car insurance cover?
car insurance policies are made up of different types of coverage that offer unlike forms of security. Liability coverage pays for the costs of property damage and bodily injury that you cause to another driver and their vehicle. For case, if you ’ re at fault for an accident, liability coverage may cover :
- The medical expenses of the other driver or their passengers if they ’ re injured in the accident
- monetary value of property damage and repairs to the early driver ’ sulfur vehicle
- Legal fees if the other party sues you
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How does liability car insurance work?
Liability coverage itself is broken into two categories : liability policy for bodily injury, and indebtedness insurance for property price. here ’ s a breakdown of how standard indebtedness indemnity coverage works :
1. Bodily injury liability insurance
Bodily injury liability policy covers the price of the other driver ’ second injuries if you ’ re in an at-fault accident. That means if you cause a car accident, bodily injury indebtedness insurance would protect you against the injure party ’ sulfur claims for expenses after the accident, such as their checkup bills, lost wages, pain and suffer, and sometimes legal fees related to injuries. demand coverage details vary from state-to-state and policy-to-policy. One rule of thumb for prospective buyers is to purchase the highest bodily injury liability coverage specify you can afford. If your coverage international relations and security network ’ t enough to pay for all injury-related costs in an accident you caused, you are susceptible to lawsuits for the remainder of what you owe out, putting fiscal assets ( like your home ) in hazard .
2. Property damage liability insurance
property damage liability coverage pays for the damage you cause to person else ’ s property with your car. typically, property price liability insurance covers repair and/or successor for damage you cause to the other person ’ sulfur vehicle, but it can besides pay for damage to a house, buildings, lampposts and call poles. precisely what particular types of place are covered may vary according to your policy, so be sure to read the contract carefully or talk to your insurance agent .
What does liability car insurance not cover?
indebtedness car policy does not cover damage to your own car, and won ’ thymine cover your medical expenses if you get injured in an accident or collision. That means if you get into a car accident and it ’ s your defect, liability coverage won ’ thymine cover any of the costs to repair your own vehicle and it besides won ’ triiodothyronine cover your hospital stays or medical bills. If another driver is at-fault for the accident, you ’ d file what is called a “ third base party claim ” with their policy company, who will reimburse you for the costs of repairs or injuries. To get coverage for your own cable car, you ’ ll need to add on collision coverage or comprehensive coverage to your policy. Those coverages, much paired together, wage for price to your own car, either from a car accident or from another type of incident, like if a tree outgrowth falls on your car .
How much liability insurance do I need?
Liability coverage is sold taking three liability instances into history : the maximum sum you ’ ll need to cover a single person ’ second injuries ; the maximum measure you ’ ll want to cover multiple people ’ randomness injuries ; and the maximum sum you feel you ’ ll need to cover the total property wrong in an accident. They are typically displayed as three amounts separated by slashes, so if you purchase indebtedness coverage that looks like 50/200/50, that would mean you have coverage of :
- $ 50,000 in bodily injury indebtedness per person
- $ 200,000 in total bodily injury liability per accident
- $ 50,000 in place price liability per accident
It ’ south broadly suggested that you spend more on liability indemnity if you can ’ thyroxine yield a hefty medical bill, and many states require indebtedness coverage in the range of $ 25,000 to $ 50,000. Although state minimums will normally cover everyday fender benders, accidents involving good place damage, injuries, or even fatalities could end up being excessively high for you to afford to cover the lie on your own after the minimum is paid out .
Liability insurance minimum requirements by state
As mentioned, car policy requirements vary by express, and in holy order to be fully protected you ’ ll probable need more coverage than merely your state ’ s minimum indebtedness insurance requirements. Below is a table outlining the standard indebtedness ( bodily injury and property damage ) coverage requirements in every state where it ’ sulfur legally mandated. Keep in beware that your state may besides require you to have other types of coverage, like personal injury protection ( PIP ) or underinsured/uninsured motorist coverage. To learn all of your state ’ mho insurance requirements, check out our state-by-state car insurance lead here .
| country | Bodily injury liability per person | Bodily wound liability per accident | property wrong liability per accident |
|---|---|---|---|
| Alabama | $25,000 | $50,000 | $25,000 |
| Alaska | $50,000 | $100,000 | $25,000 |
| Arizona | $25,000 | $50,000 | $15,000 |
| Arkansas | $25,000 | $50,000 | $25,000 |
| California | $15,000 | $30,000 | $5,000 |
| Colorado | $25,000 | $50,000 | $15,000 |
| Connecticut | $25,000 | $50,000 | $25,000 |
| Delaware | $25,000 | $50,000 | $10,000 |
| District of Columbia | $25,000 | $50,000 | $10,000 |
| Florida | Optional, unless otherwise specified by the state | Optional, unless otherwise specified by the state | $10,000 |
| Georgia | $25,000 | $50,000 | $25,000 |
| Hawaii | $20,000 | $40,000 | $10,000 |
| Idaho | $25,000 | $50,000 | $15,000 |
| Illinois | $25,000 | $50,000 | $20,000 |
| Indiana | $25,000 | $50,000 | $25,000 |
| Iowa | $20,000 | $40,000 | $15,000 |
| Kansas | $25,000 | $50,000 | $25,000 |
| Kentucky | $25,000 | $50,000 | $10,000 |
| Louisiana | $15,000 | $30,000 | $25,000 |
| Maine | $50,000 | $100,000 | $25,000 |
| Maryland | $30,000 | $60,000 | $15,000 |
| Massachusetts | $20,000 | $40,000 | $5,000 |
| Michigan | $50,000 | $100,000 | $10,000 |
| Minnesota | $30,000 | $60,000 | $10,000 |
| Mississippi | $25,000 | $50,000 | $25,000 |
| Missouri | $25,000 | $50,000 | $10,000 |
| Montana | $25,000 | $50,000 | $10,000 |
| Nebraska | $25,000 | $50,000 | $25,000 |
| Nevada | $25,000 | $50,000 | $20,000 |
| New Hampshire* | Optional; or $25,000 | Optional; or $50,000 | Optional; or $25,000 |
| New Jersey | $15,000 | $30,000 | $5,000 |
| New Mexico | $25,000 | $50,000 | $10,000 |
| New York | $25,000 | $50,000 | $10,000 |
| North Carolina | $30,000 | $60,000 | $25,000 |
| North Dakota | $25,000 | $50,000 | $25,000 |
| Ohio | $25,000 | $50,000 | $25,000 |
| Oklahoma | $25,000 | $50,000 | $25,000 |
| Oregon | $25,000 | $50,000 | $20,000 |
| Pennsylvania | $15,000 | $30,000 | $5,000 |
| Rhode Island | $25,000 | $50,000 | $25,000 |
| South Carolina | $25,000 | $50,000 | $25,000 |
| South Dakota | $25,000 | $50,000 | $25,000 |
| Tennessee | $25,000 | $50,000 | $15,000 |
| Texas | $30,000 | $60,000 | $25,000 |
| Utah | $25,000 | $65,000 | $15,000 |
| Vermont | $25,000 | $50,000 | $10,000 |
| Virginia** | Optional; or $25,000 | Optional; or $50,000 | Optional; or $20,000 |
| Washington | $25,000 | $50,000 | $10,000 |
| West Virginia | $25,000 | $50,000 | $25,000 |
| Wisconsin | $25,000 | $50,000 | $10,000 |
| Wyoming | $25,000 | $50,000 | $20,000 |
* New Hampshire doesn ’ t legally mandate drivers to carry cable car policy, but if you do purchase policy you must meet the minimum requirements listed above. If you get into an accident in New Hampshire and don ’ t have car indemnity, you ’ re still legally creditworthy for paying for any injuries or property price that you caused. ** alternatively of car insurance, Virginians can choose to pay the Virginia DMV $ 500 to legally drive on public roads. This fee does not cover you in the event of an accident, which means you ’ ll be on the hook shot financially for paying for any accidents that you cause .
What is no-fault liability car insurance?
In “ no-fault ” states, there is no need to determine who was at mistake for an accident to receive payments for injury claims. No-fault liability car insurance — presently law in 12 states — requires each party file a claim with their individual insurance company, which limits lawsuits, but intelligibly brings questions of fairness into the pen up, as irresponsible motorists are sometimes said to get off “ scot-free. ” While no-fault states don ’ triiodothyronine completely eliminate the chances that faulty drivers will get sued, it does limit the circumstances under which they can be sued. No-fault states :
- Florida
- minnesota
- hawaii
- New Jersey
- Kansas
- New York
- Kentucky
- North Dakota
- Massachusetts
- university of pennsylvania
- Michigan
- utah
If you have a no-fault policy, your policy ’ s personal injury auspices ( PIP ) can help pay for injuries, damages, or accident-related lawsuit expenses, but PIP coverage has limits and won ’ thyroxine protect you against lawsuits or accidents that run excessively high and surpass coverage limits. residual liability indemnity can fill that break and increase protective covering in the event that multiple people are affected by an accident and it results in several injuries or death .
Frequently asked questions
What is the difference between liability insurance vs. full coverage?
Liability insurance is required in most states, and it covers the price of property damage and bodily wound to the other driver and their vehicle if you ’ re at demerit for an accident. Some drivers choose to buy only liability indemnity, in order to fulfil their country ’ randomness requirements. “ Full coverage ” international relations and security network ’ t a character of insurance, but a phrase that refers to an car indemnity policy that contains both liability coverage and comprehensive examination and collision coverage. Comp coverage protects your fomite if it is damaged while you are not driving, like by a fire or storm, or if it ’ s stolen. Collision coverage pays for price to your fomite in a collision regardless of who was at fault .
Do you need liability insurance if you don’t own a car?
If you drive person else ’ south car every so frequently, the cable car owner ’ mho car policy policy will broadly cover you while you ’ re driving their vehicle — even if they ’ re not with you — but only up to a certain limit. If you frequently borrow or lease cars, you may want to consider non-owner car policy. It ’ s normally limited to merely liability — bodily injury and property damage — since it ’ second for drivers who don ’ t own a vehicle themselves therefore don ’ t need early protective covering for it.
Does liability insurance cover rental cars?
Most car policy policies besides extend liability coverage to rental cars, but you ’ ll want to talk with your insurance company to determine if the coverage suffices or whether you should add on to your current policy if you ’ rhenium rent cars frequently or for extended periods. rental cable car companies are actually required by law to carry a state ’ s minimal come of indebtedness insurance coverage on their cars, so they offer their own liability insurance for a small, per-day fee to cover damage to person else ’ south car and/or its passengers in an accident .
Should I get an umbrella policy?
An umbrella policy is a type of personal liability indemnity policy you can buy separate from car insurance that extends your overall indebtedness coverage. It ’ south called an “ umbrella ” policy because it covers everything — it can help pay the costs if you ’ re in a car accident that exceeds your car indebtedness limits, but it will besides cover your liability if you ’ re responsible for damage or injury in any other part of your life. It makes smell to consider an umbrella policy if you have a set of assets to protect .