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Drivers who prioritize cost may find liability car insurance attractive since it's usually the most affordable option. However, it also offers the least amount of protection.

Several providers offer cheap liability-only car insurance policies, but all of them only protect you against expenses from others' injuries or property damage if you cause an accident. The policies won't cover damages to your vehicle, so you’ll pay the cost of repairs out of pocket.

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Understanding Liability Car Insurance

Liability Car Insurance Definition

Most states require drivers to have auto insurance coverage — only New Hampshire and Virginia don't. Although the minimum car insurance requirements vary by state, liability coverage is always part of it.

Liability car insurance policies provide financial protection when you are behind the wheel, especially if you are at fault in an accident. It allows you to file claims that help pay for treatments for others' injuries sustained during the crash. It also covers any property damage to the other party resulting from an accident.

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Liability insurance is a term used across various insurance products. Besides car insurance policies, you'll also see it in coverage plans for homeowners, renters, professionals, businesses and more.

MoneyGeek's comprehensive guide to liability insurance provides additional information about this insurance type.

What Does Liability Car Insurance Cover?

Liability insurance covers the driver of another vehicle if you are in an accident that is your fault. It doesn't cover you, your injuries or damages to your car. Still, it can help protect you from being personally sued if you have purchased enough liability insurance to cover the other party's losses.

There are two types of liability insurance:

  • Bodily Injury Liability
  • Property Damage Liability

If someone else hits you and they are at fault, their liability insurance will cover damage to your car and your medical bills.

Bodily Injury Liability

Bodily injury liability covers the driver and occupants of the other car if you cause an at-fault accident resulting in injuries. It does not cover injuries that you or your passengers sustain in the accident. Bodily injury liability covers medical bills, pain and suffering and wages lost by the other person due to their inability to work while recovering from injuries.

Property Damage Liability

Property damage liability insurance covers damage to the other person's property — usually their car — but it can include items inside the vehicle. If you drive into a building, property damage liability will cover the damage to the building up to the policy's limit. You'll need both types of liability insurance to protect yourself.

What Does Liability Insurance Not Cover?

Liability insurance coverage is fairly sparse. It doesn't cover options such as:

  • Collision: For damage to your own vehicle
  • Comprehensive: For damage to your own car from anything other than an accident with another car
  • Uninsured motorist coverage: Protects you if someone with no insurance hits you
  • Underinsured motorist coverage: Covers you if you're hit by someone who doesn't have enough insurance
  • Personal injury protection: Includes medical expenses and lost wages

Does Liability Insurance Cover a Hit-and-Run?

A hit-and-run implies that the other driver caused the accident — and that means that his liability car insurance coverage should cover damages to your car and any injuries you or your passengers sustain.

Unfortunately, your own liability coverage won't cover these damages from a hit-and-run.

Does Liability Insurance Cover Theft?

No, liability insurance doesn't cover theft. Comprehensive insurance will cover your vehicle if someone steals it or breaks into it and damages it in the process. Comprehensive insurance also covers vandalism and weather-related damage.

Does Liability Insurance Cover Weather-Related Damage?

Liability insurance only covers the other person in an accident you cause. It doesn’t cover damage to your car if it’s damaged by hail or swept away by a flood. Comprehensive insurance covers damage to your car when it’s not moving, for causes including vandalism, the weather or theft. You can buy comprehensive coverage in addition to liability coverage.

Unless you can cover a catastrophic car accident with the money you have on hand, purchasing liability insurance is the best way to protect yourself against being sued over a car accident determined to be your fault. Even the necessary amount required by law might not be enough to protect yourself, but by shopping around and speaking to your insurance agent, you can find a cheap car insurance policy that meets your needs and gives you peace of mind.

What Does Liability Insurance Cover if You're Not at Fault?

If you're in an accident and the other person is clearly at fault, their liability insurance should cover your car's damage. If you're injured in the accident, the other person's liability insurance should also cover your medical costs. If you're in a no-fault insurance state, each insurance company covers its respective client's medical bills.

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How Does Liability Coverage Work?

If you are at fault for an accident and cause injuries to the other driver or their passengers, liability car insurance can help you with the cost of treatment. The same goes for repairs for property damage to their vehicle.

However, before your coverage kicks in, you must pay the deductible. The amount your insurer covers also depends on your policy limits. If costs from accident expenses exceed your policy limits, you will have to shoulder the remaining amount.

The Liability Insurance Formula

Liability insurance limit amounts are given as three numbers separated by slash marks, for example, 50/100/50. These numbers reference coverage limits in thousands for your policy in different categories.

The first number refers to the policy’s maximum bodily injury coverage per person, which in this case is 50, meaning $50,000. The 100 means the policy covers a maximum of $100,000 for bodily injury coverage per accident. The last 50 refers to the amount of property damage liability per accident, which would also be $50,000.

Remember that bodily injury liability is per person, while property damage liability is per accident. If you hit three people and three cars in the same accident, your insurance will cover up to $100,000 for the bodily injuries of the people you hit ($100,000 maximum) and only up to $50,000 for damages for all three cars. In this scenario, you would probably max out the policy and be held liable and possibly sued for any remaining bills.

50/100/50 Insurance Explained



$50,000 in bodily injury liability coverage per person


$100,000 in bodily injury coverage per incident


$50,000 in property damage liability per incident

How Much Liability Insurance Do I Need?

States vary in how much liability coverage they require, with most states requiring at least $15,000 in bodily injury coverage per person, $30,000 in bodily injury per accident and at least $10,000 in property damage. The policy would read 15/30/10. Some states also require uninsured motorist coverage (UM), underinsured motorist coverage (UIM) and personal injury protection (PIP).

No matter your state's requirements, you need to have liability insurance or deep pockets, as it's against the law in most states to drive without liability coverage. New Hampshire doesn't require liability insurance, but drivers must prove they have some means of financial responsibility if they cause an accident.

State minimum requirements for liability insurance may not be enough to cover you if you cause an accident. You will have to pay for anything not covered by liability insurance, and medical bills can skyrocket quickly.

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When shopping for car insurance, you need to know the minimum requirements for liability insurance in your state.

Liability Car Insurance Example Scenario

This example illustrates how liability insurance is used and how not having enough liability insurance may lead to you paying out-of-pocket costs.

Susan is driving home from work and hits another vehicle. The other car is occupied by a couple, Dan and Amy, with their child, Allison, in the back.

Susan has 50/100/50 in liability insurance.

  • Dan injures his back, and his medical bills total $30,000.
  • Amy breaks an arm and suffers internal injuries. Her medical bills cost $45,000.
  • Allison breaks a leg, and her medical bills cost $7,000.

Susan's plan covers this scenario because all three people's injuries total $82,000, and Susan is covered for up to $100,000 per accident.

In comparison, imagine there's a fourth person in the car, Tony, whose medical bills total $40,000. Susan would then be responsible for paying the extra $22,000 not covered by her liability insurance.

This also assumes no one in the car Susan hits sues her for lost wages or pain and suffering. Medical expenses add up quickly and could easily bankrupt you or significantly impact your finances.

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Liability Car Insurance Cost

The most affordable car insurance policy is a liability-only policy with state minimum coverage requirements.

At a national level:

  • The average cost of state minimum liability-only coverage is $477.
  • If you upgrade the same policy to include comprehensive and collision coverage, the average cost is $972.

On a national level, a full coverage policy will cost $494 more, on average.

Average Liability Car Insurance Cost Comparison

State Minimum Liability-Only
State Minimum Full Coverage
Difference in Cost





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Although comprehensive and collision coverages mean a more expensive policy, you and your vehicle will be covered in an accident if you're at fault. This makes the extra cost of the insurance worth it to most people.

A collision plan will cover damage that occurs from hitting something, and comprehensive covers damages from theft, weather, animals (such as hitting a deer) and vandalism. If you have a loan on your vehicle, the finance company will typically require you to carry collision and comprehensive insurance.

Liability Car Insurance Cost by State

Every insurance provider uses its own metrics to determine premiums. The average cost of car insurance will vary depending on your driving history, credit score, the state you live in and other factors.

You can better estimate the cost of a liability-only policy for you by looking at the average annual and monthly costs in your state.

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Alternatives to Liability-Only Coverage

Liability car insurance is only one of the many ways to protect yourself, whether you're behind the wheel or not. The best car insurance for you depends on your unique situation. It's best to compare providers and policies to find what matches your needs.

Umbrella Policies

An umbrella policy protects you beyond the original limits of the insurance plan. For example, you can bundle personal liability insurance with your car, homeowners or renters insurance coverage. This way, you can file a claim if someone's injured at your house — whether your child's friend gets hurt during a playdate or your housekeeper slips while doing chores.

A personal liability umbrella policy also protects you against damages if someone sues you for libel, slander, malicious prosecution or mental anguish. Most other plans don't cover these.

Full Coverage Policies

Liability car insurance costs less because it provides limited protection. It doesn't cover expenses from damage to your car.

A full coverage policy includes comprehensive and collision insurance, which protects your assets. These cover damages from collision-related (motor vehicle accidents) and non-collision-related (vandalism or fallen branches) incidents.

Although premiums are more expensive than a liability-only plan, you can still find affordable full coverage car insurance by comparing estimates from various providers.

Get Liability Car Insurance Quotes

Comparing car insurance quotes is an excellent and convenient way to get the best deal possible. You can even request car insurance quotes anonymously if you're uncomfortable sharing personal details.

Securing an online estimate involves providing the following information:

  • ZIP code
  • Age range
  • Whether or not you currently have coverage
  • The number of vehicles you want to be insured
  • If you’re a homeowner
  • Credit score range
  • Incidents
  • Whether or not you're a military member

Plug these into MoneyGeek's online quote tool and answer a series of questions to get personalized rates.

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Liability Car Insurance Frequently Asked Questions

MoneyGeek answers frequently asked questions about liability insurance to help you make a decision about coverage and find a provider.

About Mark Fitzpatrick

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Mark Fitzpatrick is a senior content director at MoneyGeek with over five years of experience analyzing the insurance market, conducting original research and creating content that can be personalized for every buyer. He has been quoted on insurance topics in several publications, including CNBC, NBC News and Mashable.

Mark earned a master’s degree in Economics and International Relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his economics and insurance knowledge to bring transparency around financial topics and help others feel confident in their money moves.