Updated 25 Jan 2024 
3 Minute Read
Liability insurance covers damages done to others and their property when you are at fault in an accident. Most states require this to drive your vehicle legally. Liability coverage is broken down into two parts:
- Property damage coverage: pays for damage to property that is not your own
- Bodily injury (BI) coverage: pays for those injured in an accident you caused
Candidate for Liability Insurance
When you drive a vehicle, it’s essential to have Liability insurance. Liability Insurance helps protect you, up to your limits, by paying for covered damages and injuries in at-fault accidents.
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What Does Liability Insurance Cover?
Liability coverage consists of property damage liability coverage and bodily injury coverage. Property damage is an unfortunate side effect of a car accident. This includes damages to other people’s property such as vehicles, yards and light poles involved with your crash. Your coverage may also include a rental car for the other person involved in the collision while their car is being repaired.
Other coverage includes:
- Repair to the living room wall you crashed through
- Removal of the knocked over tree
- Defense and court costs if you are sued
Bodily injury covers injury sustained within the accident for the other party involved. This can include:
- Medical bills
- Medical expenses
- Prescriptions
- Lost wages
- Pain and suffering
Some states have conditions on who can file a bodily injury claim against you. When it comes to liability insurance, the amount your insurer will pay for a covered accident depends on what you select as coverage limits. Each state has set minimum requirements that drivers must purchase, but if any additional funds are needed, certain policies might provide them at an additional cost; this could mean three different types of Liability limits found within one policy!
What Does Liability Coverage Not Cover?
Liability coverage helps protect you from being held liable for damages that occur due to an accident. It does not, however, cover any of your property or injuries. These are covered under other types of coverage, such as:
- Collision Coverage
- Comprehensive Coverage
- Medical Payments Coverage
- Personal Injury Protection
Liability Auto Insurance in the No-Fault States
It doesn’t matter who was at fault for an accident in some states. Your insurance company covers personal injury damages, no matter who is at fault. Surprisingly, no-fault states still demand that motorists buy property damage liability and, in some cases, bodily injury liability coverage as well. The following states have no-fault insurance laws:
- Florida
- Hawaii
- Kansas
- Kentucky*
- Massachusetts
- Michigan
- Minnesota
- New Jersey*
- New York
- North Dakota
- Pennsylvania*
- Utah
*Drivers can choose to operate under the no-fault or at-fault system when purchasing or renewing their car insurance policy.
What is a Personal Liability Umbrella Policy
Different types of liability coverage can protect your assets if you’re involved in an accident. One type is an Umbrella Insurance Policy that protects your financial future should lawsuits arise from accidents involving cars, homes, and boats.
How Much Does Liability Coverage Cost?
The cost of your auto insurance policy depends on many factors, like the type and amount of coverage you select. For example, higher limits may be more expensive. Please contact our team for more information for a quote, and your state minimums for this coverage. When you get into an accident and are found liable, any costs that exceed your liability coverage limits are fines — or, in other words, paid out-of-pocket. That’s why it might be worth looking into increasing the auto insurance policy itself if possible, though this can depend on where exactly these penalties come from (state law varies).
Do I Need Liability Insurance by Law?
In most states, liability insurance coverage is required by law. States that do not require the vehicle owner to carry car insurance include Virginia and Mississippi. Even if your state does not require it – having Casualty Insurance is incredibly important.
Want to learn more about liability car insurance coverage? Contact us today! We’ll help you find the best car insurance companies in your area to ensure you have the most comprehensive insurance.
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