Liability Car Insurance Coverage (Complete Guide)

Key Points to Remember When Considering an Auto Policy
Your auto insurance can only financially protect you up to your policy limits for property damage or bodily injury resulting from an accident
Be mindful of state requirements in your state regarding your car insurance
Regularly review your auto insurance and know what is covered by your auto policy
Review how to file a claim with your specific auto insurance company
If you are involved in an accident, have a plan on how to protect yourself and others.

What is liability insurance? That’s a question that many drivers ask after they have purchased car insurance. Car insurance can be confusing. But you don’t need to be a trained and licensed professional to understand it. We’re here to help.

So, what exactly is covered with your auto insurance policy?

Keep reading to find out more information about liability coverage — what it is and how much you need to make sure you’re financially covered in the event of an accident.

State Car Insurance Requirements

Each state has its own requirements when it comes to car insurance. Whether you’re moving to a new state, coming off your parents’ insurance, or just trying to get a better deal, you need to know the requirements for your state before you purchase a policy.

Some states have no-fault laws, while others have at-fault laws. These are designations pertaining to how a claim is filed and which party is required to pay after an accident.

Because of these laws, some states may require more coverage for potential medical costs. This is called personal injury protection.

Knowing your state law and minimum requirements can make the process of finding insurance much easier. Most, if not all, coverage providers will require a ZIP code to begin determining your rate, because they need to know what state you’ll be driving in.

Let’s take a look at state requirements.

Cheap Liability Coverage by State

Find your state below to learn how much insurance you need on your vehicle to drive legally in your state. Take special note of New Hampshire and Virginia laws.

Alabama

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident

Alaska

  • $50,000 bodily injury liability per person
  • $100,000 bodily injury liability per accident
  • $25,000 property damage liability per accident

Arizona

  • $15,000 bodily injury liability per person
  • $30,000 bodily injury liability per accident
  • $10,000 property damage liability per accident

Arkansas

  • $15,000 bodily injury liability per person
  • $30,000 bodily injury liability per accident
  • $10,000 property damage liability per accident

California

  • $15,000 bodily injury/death liability per person
  • $30,000 bodily injury/death liability to more than one person
  • $5,000 property damage liability per accident

Colorado

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $15,000 property damage liability per accident

Connecticut

  • $20,000 bodily injury liability per person
  • $40,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $25,000 uninsured/underinsured motorist coverage per person
  • $50,000 uninsured/underinsured motorist coverage per accident

Delaware

  • $15,000 bodily injury or death per person
  • $25,000 bodily injury liability per accident
  • $10,000 property damage liability per accident

Florida

  • $10,000 property damage liability per accident
  • $10,000 personal injury protection

Georgia

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident

Hawaii

  • $20,000 bodily injury liability per person
  • $40,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
  • $10,000 personal injury protection

Idaho

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $15,000 property damage liability per accident

Illinois

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $20,000 property damage liability per accident
  • $25,000 uninsured motorist coverage per person
  • $50,000 uninsured motorist coverage per accident

Indiana

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident

Iowa

  • $20,000 bodily injury liability per person
  • $40,000 bodily injury liability per accident
  • $15,000 property damage liability per accident

Kansas

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
  • $25,000 uninsured/underinsured motorist coverage per person
  • $50,000 uninsured/underinsured motorist coverage per accident
  • Personal injury protection ($4,500 in medical expenses, up to $900 per month for disability or loss of income, $25 per day for in-home services, $4,500 for rehabilitation, $2,000 for funeral burial or cremation costs)

Kentucky

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $10,000 personal injury protection

Louisiana

  • $15,000 bodily injury liability per person
  • $30,000 bodily injury liability per accident
  • $25,000 property damage liability per accident

Maine

  • $50,000 bodily injury liability per person
  • $100,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $50,000 uninsured motorist coverage per person
  • $100,000 uninsured motorist coverage per accident
  • $2,000 medical payments coverage

Maryland

  • $30,000 bodily injury liability per person
  • $60,000 bodily injury liability per accident
  • $15,000 property damage liability per accident

Massachusetts

  • $20,000 bodily injury liability per person
  • $40,000 bodily injury liability per accident
  • $5,000 property damage liability per accident
  • $20,000 uninsured motorist coverage per person
  • $40,000 uninsured motorist coverage per accident
  • $8,000 personal injury protection

Michigan

  • $20,000 bodily injury liability per person
  • $40,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
  • Personal injury protection.

Michigan offers no-fault insurance with mandatory coverages of $1 million in property protection (PPI). PPI pays up to $1 million for damage your vehicle does in Michigan to other people’s property, such as buildings and fences.

Minnesota

  • $30,000 bodily injury liability per person
  • $60,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
  • $25,000 uninsured/underinsured motorist coverage per person
  • $50,000 uninsured/underinsured motorist coverage per accident
  • $40,000 personal injury protection

Mississippi

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident

Missouri

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
  • $25,000 uninsured motorist coverage per person
  • $50,000 uninsured motorist coverage per accident

Montana

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $20,000 property damage liability per accident

Nebraska

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $25,000 uninsured motorist coverage per person
  • $50,000 uninsured motorist coverage per accident

Nevada

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $20,000 property damage liability per accident

New Hampshire

Car insurance is not a mandatory requirement by state law. That does not mean you’re totally off the hook if you get into an accident, though. You’ll still be responsible for any bodily injury or property damage that occurs as a result of an accident you caused.

Unless you have millions in the bank and want to spend it covering medical bills and damages, the best way to ensure you can pay for a claim would be to purchase insurance in New Hampshire. If you do decide to buy insurance, New Hampshire still has the following minimum requirements:

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $25,000 uninsured/underinsured motorist coverage per person
  • $50,000 uninsured/underinsured motorist coverage per accident
  • $25,000 uninsured/underinsured motorist property damage coverage
  • $1,000 medical payments coverage

New Jersey

  • $15,000 bodily injury liability per person
  • $30,000 bodily injury liability per accident
  • $5,000 property damage liability per accident
  • $15,000 uninsured motorist bodily injury

New Mexico

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $10,000 property damage liability per accident

New York

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $50,000 liability for death per person
  • $100,000 liability for death per accident
  • $10,000 property damage liability per accident
  • $50,000 personal injury protection
  • $25,000 uninsured motorist coverage per person
  • $50,000 uninsured motorist coverage per accident

North Carolina

  • $30,000 bodily injury liability per person
  • $60,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $30,000 uninsured motorist coverage per person
  • $60,000 uninsured motorist coverage per accident
  • $25,000 uninsured motorist property damage coverage per accident

North Dakota

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $25,000 uninsured/underinsured motorist coverage per person
  • $50,000 uninsured/underinsured motorist coverage per accident
  • $30,000 personal injury protection

Ohio

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident

Oklahoma

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident

Oregon

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $20,000 property damage liability per accident
  • $25,000 uninsured motorist coverage per person
  • $50,000 uninsured motorist coverage per accident
  • $15,000 personal injury protection

Pennsylvania

  • $15,000 bodily injury liability per person
  • $30,000 bodily injury liability per accident
  • $5,000 property damage liability per accident
  • $5,000 medical benefits

Rhode Island

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident

South Carolina

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $25,000 uninsured motorist coverage per person
  • $50,000 uninsured motorist coverage per accident
  • $25,000 uninsured motorist property damage coverage

South Dakota

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $25,000 uninsured/underinsured motorist coverage per person
  • $50,000 uninsured/underinsured motorist coverage per accident

Tennessee

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $15,000 property damage liability per accident

Texas

  • $30,000 bodily injury liability per person
  • $60,000 bodily injury liability per accident
  • $25,000 property damage liability per accident

Utah

  • $25,000 bodily injury liability per person
  • $65,000 bodily injury liability per accident
  • $15,000 property damage liability per accident
  • $3,000 personal injury protection

Virginia

Virginia is similar to New Hampshire. Car insurance is not required, but you must be able to pay for damages and injuries caused by your vehicle.

Virginia does take it one step further; if you choose not to have insurance you must pay a fee to the state department of vehicles. This fee does not mean you have insurance or any coverage at all. You still must be able to pay for damages incurred from an accident.

And again, if you choose to purchase car insurance, Virginia does have minimum requirements:

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $20,000 property damage liability per accident

Vermont

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
  • $50,000 uninsured/underinsured motorist coverage per person
  • $100,000 uninsured/underinsured motorist coverage per accident
  • $10,000 uninsured/underinsured motorist property damage coverage per accident

Washington

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $10,000 property damage liability per accident

Washington D.C.

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
  • $20,000 uninsured/underinsured motorist coverage per person
  • $50,000 uninsured/underinsured motorist coverage per accident
  • $5,000 uninsured/underinsured motorist property damage coverage per accident

West Virginia

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
  • $25,000 uninsured motorist coverage per person

Wisconsin

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $10,000 property damage liability per accident
  • $25,000 uninsured motorist coverage per person
  • $50,000 uninsured motorist coverage per accident

Wyoming

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $20,000 property damage liability per accident

How much liability insurance should I purchase?

You just read through all the states and their requirements. Remember, these are only the minimum required amounts.

Look at it this way. Say you live in Washington state and you drive a 2015 Lexus GX and you collide with a 2019 Audi Q5. This accident is your fault and you are liable for damages and injuries. You decided to get the cheapest insurance, because who wants to pay a fortune for something you’re never going to use? Until now.

Washington state limits are $10,000 for property damage. If you totaled the 2019 Audi Q5, you’re looking at a bill of at least $40,000.

And that’s not even including any injuries you or the other driver might’ve sustained. We all know medical expenses can add up quickly. If you only have the minimum requirements, you’re looking at $25,000 per person or $50,000 for multiple people. If serious injuries are involved, those limits aren’t going to cover it.

So is there a magic formula for knowing how much insurance you should purchase? No, there is no formula. You need to look at your budget and how much you can afford. You also need to look at options like uninsured/underinsured coverage that will protect you in a situation like this if you’re the one driving the Audi Q5.

Some financial experts say that unless you’re restricted with your budget, you should at least purchase $100,000 per person, $300,000 per accident, and $35,000 property damage.

What does liability car insurance cover?

Since everyone that owns a car needs to buy liability insurance (in most states), you should know what it covers. Liability coverage is used when you or someone else listed on your policy that is driving your vehicle gets into an accident. It pays for damages and injuries you are liable for.

Liability coverage is for bodily injury and property damage. The terms are pretty self-explanatory. Bodily injury means injuries to a person and property damage refers to the damage to the other person’s car, and/or to structures such as buildings, fences, lamp posts, etc.

What is liability only coverage?

There are a lot of different coverages you can add to your policy. Two well-known options that most people add to their policy are comprehensive and collision.

Comprehensive and collision are types of coverage that pay for damage done to your car. Collision covers accident-related damage, while comprehensive covers damage resulting from things like weather, natural disaster, or vandalism. These may be required if you have a lienholder or financing on your vehicle.

If you chose to only have liability coverage, you have liability-only coverage.

What is a good bodily injury limit?

Remember, your bodily injury coverage pays for any injuries you’re deemed responsible for as the result of an accident.

Let’s look at the state of Texas. Bodily injury liability limits are $30,000 per person and $60,000 per accident. So, if you are held liable for injuries in an accident in this state, your coverage would only pay up to those limits.

So as we mentioned earlier, there is no set amount you should purchase. We advise you to purchase the most coverage possible within your budget.

If you’re in an accident causing $70,000 of bodily injury and you only have $30,000 worth of coverage, you could be held liable for the remainder of the claim.

Difference Between per Person and per Accident

When you see limits for bodily injury liability, you will notice there are two different numbers. One is the designated limit per person and the other is the limit per accident.

Let’s go back to Texas. The minimum requirement limits are $30,000 bodily injury liability per person and $60,000 bodily injury liability per accident. If you are in an accident and liable for damages, your policy would only pay out $30,000 per person involved in the accident.

So, if you were in an accident and injured one person with a total of $30,000 in medical expenses then your insurance company would pay out $30,000 for that one person.

But what if you’re in an accident and multiple people are hurt? The $60,000 limit would then come into play. If two people were hurt, each could be given a maximum of $30,000, which would total up to the $60,000 limit. And if three people were hurt then they would need to divide the $60,000, with no one person receiving more than $30,000.

Always remember, your insurance will only pay up to the limits of your policy. That is why it is so important to have enough coverage.

What is a good property damage limit?

Property damage is usually the smallest limit listed. For instance, Pennsylvania limits are $15,000 bodily injury liability per person, $30,000 bodily injury liability per accident, and $5,000 property damage liability per accident.

That means if you are held liable for property damages from an accident, the minimum requirement coverage would only pay out $5,000 for this accident. What if you hit a brand new car? Or what if you lost control and damaged a house or other structure? Chances are you would not get very far on $5,000.

In May 2019, the average price of a new car reached almost $37,000. As a buyer, you need to look at how much coverage you can afford and how much risk you’re willing to take on.

Average Liability Car Insurance Rates

So how much is this going to cost?

We looked at data from the National Administration of Insurance Commissioners and compiled rates for all states from 2011 to 2015. Find your state below to see how they compare.

STATE 2015 2014 2013 2012 2011
Countrywide $538.73 $530.01 $517.88 $503.28 $492.03
Alabama $394.21 $381.98 $372.44 $359.88 $354.35
Alaska $539.68 $550.59 $555.04 $544.66 $546.71
Arizona $508.76 $507.18 $490.78 $473.30 $462.94
Arkansas $394.13 $392.46 $380.78 $371.02 $367.29
California $489.66 $478.71 $463.56 $443.41 $439.39
Colorado $520.04 $500.72 $473.68 $449.65 $441.41
Connecticut $650.94 $642.95 $635.62 $626.47 $613.77
Delaware $799.30 $795.35 $783.30 $759.04 $745.53
Florida $857.64 $837.24 $860.36 $856.39 $813.60
Georgia $557.38 $516.63 $485.40 $454.76 $439.02
Hawaii $458.54 $458.83 $457.09 $453.45 $464.55
Idaho $344.29 $348.12 $339.50 $326.00 $327.96
Illinois $446.72 $434.80 $424.92 $422.12 $424.12
Indiana $382.68 $371.69 $363.00 $376.23 $368.61
Iowa $299.18 $294.97 $291.24 $290.46 $290.86
Kansas $358.24 $354.24 $342.27 $329.67 $327.21
Kentucky $529.21 $523.10 $522.34 $516.40 $503.52
Louisiana $775.83 $750.23 $723.93 $698.21 $687.56
Maine $338.87 $336.70 $333.69 $332.07 $328.25
Maryland $609.74 $607.19 $596.17 $594.28 $590.02
Massachusetts $606.04 $598.71 $589.38 $578.75 $565.87
Michigan $795.32 $811.43 $742.38 $660.93 $600.14
Minnesota $456.82 $453.29 $441.81 $428.63 $417.37
Mississippi $460.50 $448.60 $434.88 $424.58 $418.34
Missouri $415.88 $406.67 $399.08 $390.04 $385.39
Montana $386.29 $392.53 $388.54 $383.76 $387.71
Nebraska $364.64 $353.26 $347.54 $340.33 $339.58
Nevada $681.56 $673.05 $648.19 $619.71 $612.84
New Hampshire $400.56 $395.51 $391.92 $390.72 $387.51
New Jersey $869.57 $881.58 $882.82 $860.59 $833.20
New Mexico $488.03 $484.62 $464.51 $441.11 $432.78
New York $804.51 $796.39 $791.14 $780.41 $752.43
North Carolina $359.42 $358.56 $355.19 $356.63 $358.16
North Dakota $298.18 $295.87 $285.12 $272.71 $260.86
Ohio $397.11 $388.88 $374.53 $362.97 $357.31
Oklahoma $461.01 $458.72 $443.88 $428.09 $416.16
Oregon $584.13 $585.26 $562.95 $527.64 $507.19
Pennsylvania $499.06 $496.87 $497.28 $495.22 $486.66
Rhode Island $759.80 $739.87 $719.53 $702.52 $678.60
South Carolina $527.09 $510.04 $495.96 $485.30 $469.12
South Dakota $300.22 $297.38 $289.39 $281.04 $277.16
Tennessee $413.91 $409.79 $400.64 $387.40 $376.90
Texas $528.75 $516.26 $496.68 $477.18 $473.31
Utah $497.53 $486.87 $465.62 $454.35 $451.94
Vermont $343.12 $341.60 $343.85 $340.55 $335.79
Virginia $425.61 $427.94 $415.86 $401.50 $394.70
Washington $596.67 $589.97 $569.42 $547.11 $541.42
Washington D.C. $628.82 $629.25 $634.70 $624.34 $623.34
West Virginia $491.83 $505.40 $506.60 $503.05 $500.31
Wisconsin $374.37 $367.00 $354.57 $346.74 $356.54
Wyoming $321.04 $335.59 $323.25 $316.53 $320.47

North and South Dakota have the lowest average for liability insurance and New Jersey is at the top of the list with the highest average.

Claims and Car Insurance

Accidents happen. That’s why we have insurance.

So what type of claim does liability insurance cover? What if you didn’t buy enough and you find yourself in a situation where your claim is bigger than your coverage? Should you hire a lawyer?

In this last section, we’re going to answer these important questions regarding your liability coverage and claims.

What type of claim does liability coverage cover?

Trying to figure out what type of claim your liability insurance will cover starts with knowing your state laws. Each state has its own law regarding how accidents are handled.

Some states are no-fault and others are at-fault states.

Not sure what no-fault and at-fault means? You’re not alone. Many drivers are not quite sure how their state handles claims until they’re actually in an accident and need to figure it out on the fly.

No-fault states are listed below.

  • District of Columbia
  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • Pennsylvania
  • Utah

These states all have variations of no-fault laws. No-fault means that no matter who is at fault for the accident, you file the claim for your own damages and injuries.

If you live in a no-fault state, you’ll likely have an easier time filing a claim. There is no guessing who is at fault and trying to prove your case. It also takes the guesswork out of who will pay the claim.

If you live in a state that has at-fault laws, this means the driver who is at fault for the accident is the one who files the claim with their insurance company.

What if I cause an accident that costs more than my liability limit?

Earlier we talked about how much liability you should purchase. You never know how much a car accident is going to cost. It all depends on how much damage was done, the types of vehicles involved, and how badly people are injured.

Sadly, a time may come when you are hit or you hit someone else and damages exceed your limits. So, what happens next?

Let’s take a look at Vermont. Minimum requirements for a driver in Vermont are $25,000 bodily injury liability per person, $50,000 bodily injury liability per accident, $10,000 property damage liability per accident, $50,000 uninsured/underinsured motorist coverage per person, $100,000 uninsured/underinsured motorist coverage per accident and $10,000 uninsured/underinsured motorist property damage coverage per accident.

If you were hit by someone found at fault for the accident with minimum limits and you have $45,000 worth of medical claims, you can get $25,000 from their policy and then file a claim for the remaining $15,000 because you have underinsured coverage through your insurance carrier.

Not all states require uninsured and/or underinsured motorist coverage. Regardless, you should be able to add this type of coverage to your policy if you discuss it with your provider.

When should I get a lawyer?

There are some cases when you need to get a lawyer involved in your insurance claim. Maybe the at-fault driver didn’t have enough insurance and you didn’t have/didn’t have enough underinsured coverage to pay your damages.

Attorneys can take over the crucial part of communicating with the insurance company and/or adjuster. Your attorney can also obtain critical evidence regarding your case and negotiate on your behalf.

Most insurance claims do not require an attorney. Attorneys are often needed in cases with no insurance or when negligence caused major injuries or even death.

Bottom Line

Every driver on the road should have liability coverage. All states have minimum limits required when you purchase insurance. But are minimum limits enough? Chances are, they are not.

Start looking today for affordable quotes to get you covered on the road.

References:

  1. https://drivinglaws.aaa.com/tag/liability-laws/
  2. https://money.cnn.com/pf/money-essentials-car-insurance/index.html
  3. https://www.iii.org/article/what-covered-basic-auto-insurance-policy
  4. https://www.cnbc.com/2019/10/22/car-prices-are-rapidly-increasing-heres-why-thats-bad-for-americans.html
  5. https://www.naic.org/prod_serv/AUT-PB-14.pdf
  6. https://www.nolo.com/legal-encyclopedia/how-does-no-fault-car-insurance-claim-work.html
  7. https://www.nolo.com/legal-encyclopedia/what-if-im-at-fault-for-a-car-accident.html
  8. https://www.nolo.com/legal-encyclopedia/when-make-underinsured-uninsured-driver-insurance-claim.html
  9. https://www.nolo.com/legal-encyclopedia/how-attorney-can-help-with-your-car-accident-claim.html