Liability car insurance coverage
Liability car insurance is a standard part of auto insurance coverage that helps cover the financial costs of an accident if you’re found at fault. Essentially, liability insurance coverage protects you financially if you’re responsible for an accident that causes someone else injury or property damage. It doesn’t cover your own injuries or damage to your own car. Liability coverage is required in most states to legally drive your car.
What is liability car insurance?
Liability car insurance, also known as liability coverage, is a “third-party coverage,” meaning it covers other people (not you) for their injuries and property damage if you cause an accident. Even though it doesn’t cover your injuries or damaged property, car liability insurance does protect you from being financially responsible if you cause an accident.
What are the types of liability insurance for cars?
There are two types of liability car insurance:
- Bodily injury liability: This type of coverage helps pay for the medical expenses of anyone injured in an accident that you cause. It also covers lost wages and pain and suffering.
- Property damage liability: This type of coverage helps pay for the cost of repairing or replacing property that you damage in an accident. This could include the other driver’s car, a mailbox, or a fence.
What does liability insurance cover?
Liability car insurance is a type of car insurance that helps cover the financial costs up to the limits of the policy of an accident if you’re found at fault for the accident.
| Bodily injury liability coverage (BI coverage) | Property damage liability coverage (PD coverage) |
|---|---|
| This type of coverage helps pay for the medical expenses of anyone injured in an accident that you caused. It also covers lost wages and pain and suffering. | This type of coverage helps pay for the cost of repairing or replacing property that you damaged in an accident. This could include the other driver’s car, a mailbox, or a fence. |
What is the difference between bodily injury liability coverage and property liability insurance?
Bodily injury liability coverage
Bodily injury liability coverage covers, up to the limits of your policy, the cost of medical expenses, lost wages, and pain and suffering for people who are injured in an accident that you cause.
Property damage liability insurance
Property damage liability insurance covers the cost of damage you cause to another person’s property in a car accident up to the limits of the policy. This can include damage to their car, home, or other property.
Who does bodily injury insurance cover?
- The other driver involved in the accident.
- Their passengers.
- Any pedestrians or cyclists who are injured.
- Passengers in your vehicle (except passengers who are insured on your policy or who are family members living with you).
Bodily injury liability coverage doesn’t cover your injuries – it covers only the injuries of others from an accident that you caused.
On most car insurance quotes and policies, bodily injury limits are broken out into two numbers. For example, if your bodily injury limits are $25,000/$50,000, this means that your policy will cover up to $25,000 per person for bodily injury and up to $50,000 per accident for bodily injury.
Examples of what bodily injury liability coverage can cover include:
General damages covered by bodily injury insurance.
- Medical treatment expenses for people that are injured in an accident you cause.
Special damages covered by bodily injury insurance.
- Other losses related to bodily injuries of other people in an accident you cause, such as lost wages, pain, suffering, funeral expenses, and legal fees.
What does property damage liability insurance cover?
Property damage liability insurance helps cover you if your car damages someone else’s property. Usually, it’s another car or vehicle, but it could be a fence, house, or any other property damaged in an accident. It can also help cover the cost of legal defense if the property owner files a lawsuit against you. Your property damage liability limit is the third dollar amount in the string of numbers you may hear when people talk about car liability insurance limits (e.g., $25,000/$50,000/$20,000).
General damages covered by property damage insurance.
Here are some examples of what property damage liability insurance can cover:
- Damage to another car
- Damage to a house
- Damage to a fence
- Damage to a mailbox
- Damage to a store window
It’s important to note, property damage liability coverage doesn’t cover damages to your vehicle—to have your vehicle covered, you would need collision and comprehensive coverage.
The per-accident limit for property damage liability coverage is the maximum amount that can be paid for all property damage resulting from any one auto accident. This is why understanding your limits is so important because if you opt for minimum coverage or have lower limits, you’ll be on the hook for any outstanding costs after your limits cap out.
Cost of getting minimum coverage
For example, let’s say your state’s required minimum limit for property damage liability coverage is $20,000. You accidentally cause an accident and total a brand new $48,000 vehicle. If you only have the minimum coverage, you would be on the hook for over half the cost of replacing the other drivers’ vehicle.
It’s important to know that your automotive liability coverage limits aren’t about the value of your vehicle—they’re about the value of other vehicles on the road around you.
Personal liability umbrella policy
Another type of liability coverage that can help protect your financial assets in the event you’re in an accident is an umbrella policy (also referred to as umbrella insurance). An umbrella policy can provide coverage above what your car liability insurance covers in the event that you’re found at fault in an accident.
If you’re interested in learning more about umbrella insurance to find out whether it’s the right choice for you, check out this informative guide from The Glove Box: Is Umbrella insurance right for you?
Frequently asked questions about liability car insurance coverage
The following questions provide information about liability insurance for cars.
Is liability car insurance coverage required?
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Liability coverage is required by law in most states.
What does liability car insurance not cover?
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Liability car insurance doesn’t cover the following:
- Your own medical bills or property damage resulting from an accident. This is why it’s important to have health insurance and collision and comprehensive coverage in addition to liability coverage.
- Damage to your car caused by intentional acts by a third party, such as vandalism or theft. This could be covered by comprehensive coverage.
- Loss of wages if you’re unable to work due to an accident. This could be covered by personal injury protection (PIP) or medical payments (MedPay) coverage. Details of income loss coverage vary by state.
It’s important to understand what liability car insurance does and doesn’t cover so that you can make sure you have the right type of coverage for your needs.
When should you increase your liability car insurance coverage?
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If you currently carry lower liability limits, we recommend reviewing your policy and seeing where you can expand those limits. It would be ideal to review your car insurance at open enrollment, but any time is a good time. Particularly great times are whenever you experience a major life change that will affect who and what you need to cover (for example, if you’re newlywed and need to add your spouse to your insurance plan, or if it is time to add a teen driver to your policy or if your financial circumstances have changed. It’s important to review your policy to make sure that you have enough coverage in case you’re at fault in an accident.
How much liability car insurance do I need?
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If you’re still unsure about how much liability car insurance coverage to purchase, it’s worth noting that the more you purchase, the less you’ll have to pay out-of-pocket in the event that the other party’s expenses exceed your coverage limits. You may be legally responsible for paying those additional costs. Speak to a licensed agent to ensure you get coverage that meets your needs or check out our Coverage Wizard for recommendations.
Does liability insurance cover theft?
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No, liability insurance doesn’t cover theft. Liability insurance is designed to protect you from financial responsibility if you’re found at fault in an accident. It helps covers the costs of the other driver’s property damage and bodily injuries, up to the limits of your policy.
If your car is stolen, liability insurance will not cover the cost of replacing your car. To be covered for theft, you need to have comprehensive coverage. Comprehensive coverage is a type of insurance that covers your car for damage that is not caused by a collision. This includes damage caused by theft, vandalism, fire, and natural disasters.
What does liability insurance cover vs. full coverage?
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Liability insurance is the minimum coverage required by law in most states. It covers the costs of other people’s bodily injury and property damage that you cause in an accident. It doesn’t, however, cover damage to your vehicle. This is covered by comprehensive and collision coverage. When a car insurance policy has liability, comprehensive and collision coverage (and sometimes other coverages) is sometimes referred to as full coverage. Though, keep in mind, full coverage car insurance is not an official car insurance term and may mean different things to different people.
Do I need liability car insurance?
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Liability car insurance is a standard part of auto insurance coverage that helps cover the financial costs of an accident if you’re found at fault. Drivers are required in most states to carry liability insurance to be able to legally drive their car. The minimum amount of liability car insurance required varies by state.
The minimum amount of car insurance you need to buy varies by state. Check with your state’s department of insurance for information on required coverages and minimum limits.
What happens if I don’t have enough liability insurance for a car accident?
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If you don’t have enough liability insurance for a car accident, you could be personally liable for the other driver’s damages. This means that you could be responsible for paying for their medical bills, property damage, and pain and suffering if your insurance policy doesn’t cover the full amount.
It’s important to have enough liability insurance. The minimum liability limits required by your state may not be enough to protect you in the event of a serious accident. You may want to consider purchasing higher liability limits, especially if you have assets that you want to protect.
In an accident but didn’t get the other driver’s information?
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It can happen, you’ve been in an accident, and you didn’t get the other driver’s contact and insurance information. Maybe it was a hit-and-run, or you were flustered, or the other party wouldn’t share their information. After you’ve gotten to a safe place and determined no one involved needs medical attention, check to see if there were witnesses, call the police, take photos, and call your insurance company.
Get liability car insurance coverage from trusted agents at Elephant Insurance!
Contact us to learn more about how you can apply for liability car insurance. Elephant provides car insurance discounts, coverages to protect you and your property, and other services.
More questions about car insurance coverage?
Visit our Coverage Wizard and answer a few questions to learn more about types of coverages you may want to have on your car insurance policy. Or contact us to speak to one of our licensed agents.