Compare Liability Car Insurance: Rates, Discounts, & Requirements [2023]

• Liability insurance consists of property damage liability insurance and bodily injury liability insurance 
• Most states require drivers to carry a minimum limit for both types of liability insurance 
• In most cases, we recommend drivers carry higher limits of liability insurance coverage than what their state requires

driving without insurance face fines, a suspended license, and more. 

Rates for liability insurance vary from state to state and from driver to driver, so it’s important to do your research and use car insurance comparison charts to find rates that are affordable for you. Continue reading to learn more about this essential coverage, from what liability insurance covers to the cost of liability insurance. 

What Liability Insurance Covers 

What does liability insurance cover? Vehicle liability insurance consists of two parts: bodily injury liability insurance and property damage liability insurance. Depending on your state, one or both of these liability insurance coverages may be required. 

Bodily Injury Liability Insurance 

What is liability insurance for bodily injuries? Bodily injury liability insurance coverage pays the medical bills if you cause an accident that injures other people. Typically, bodily injury liability insurance will cover the following: 

• Medical expenses 
• Rehab expenses 
• Lost wages 
• Funeral costs 

If someone needs more extensive therapy to recover or can’t work after the accident, bodily injury liability insurance will help pay the bills up to the policy’s limit. 

Property Damage Liability Insurance 

Property damage liability insurance works the same as bodily injury liability insurance, but instead of paying for medical bills, it pays for property damage bills. So if you are responsible for an accident that damages another’s vehicle or property, such as crashing into their fence, property damage liability insurance will pay the bills up to the policy limits. 

In general, liability insurance for both coverages may also help pay for some of your legal fees if you are sued after an accident you caused. However, you will need higher liability limits for there to be any money left to apply toward legal fees if you cause a major accident. 

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What Liability Insurance Doesn’t Cover 

There are a number of things that liability insurance doesn’t cover. Liability insurance coverage is intended simply to pay for other parties’ accident costs if you are responsible for a car accident. So there are a number of areas where you are left unprotected. Liability insurance won’t pay for the following: 

• Expenses beyond your liability policy’s limit. Liability auto insurance will only cover bills up to your policy’s maximum limit. 
• You or your passengers’ medical bills. Liability insurance only covers the medical bills of other parties’ that were not in your vehicle. If you’re wondering, “does car insurance cover passengers in my vehicle?” If it’s a liability-only policy, the answer is no.
• Repairs to your vehicle. Liability insurance only covers repairs to the other parties’ vehicles, not yours. 

Carrying just car liability insurance can be a huge financial risk unless your vehicle isn’t worth much and you wouldn’t suffer financially if it were totaled. You also should consider carrying higher limits of liability insurance than what is required by your state, as you will be responsible for any expenses that exceed your insurance’s limits. 

What other coverages should I carry? 

Because liability insurance doesn’t offer complete financial protection to drivers, some of the other auto insurance coverages that drivers should consider carrying include: 

• Collision insurance. Regardless of who caused the accident, collision insurance will pay for your car repairs if you crash into another vehicle or a stationary object like a fence post or mailbox. 
• Comprehensive insurance. Comprehensive car insurance will pay for your car repairs if you crash into an animal or your car is damaged from the weather, vandalism, theft, or falling objects. 
• Medical payments (MedPay) insurance. MedPay will pay for you and your passengers’ medical bills after an accident, such as ambulance rides and hospital visits. 
• Personal injury protection (PIP) insurance. Personal injury protection insurance is similar to MedPay, but in addition to paying off your and your passengers’ medical bills, it will also help with lost wages, childcare, and more after the accident if a person has a longer recovery. 

MedPay and PIP are both required insurance coverages in some states, so you may already have to carry one of these two personal medical coverages in addition to your liability insurance. Collision and comprehensive insurance are not required in any states, but if you have a lease or loan on your vehicle, your lender will likely require you to carry these two coverages. 

Even if not required, we recommend carrying collision and comprehensive insurance on your vehicle. Otherwise, in any accident you cause, you will have to pay for any repairs yourself. If you are unable to pay for a new car or expensive repairs out of pocket, it is well worth it to pay extra each month for collision and comprehensive auto insurance.  

Do drivers need liability insurance? 

Yes, if drivers live in the U.S., they will need whatever car liability coverage their state requires. The minimum car insurance required by each state is different, but most require liability. A few states allow drivers to opt out of carrying liability car insurance, but these drivers need to provide proof that they would be financially capable of paying for other drivers’ medical bills and property damage bills. If you have a lease or loan on your vehicle, however, your lender will likely require you to carry the state’s minimum liability insurance instead of opting out of coverage. 

Below, you can see a full list of the auto liability coverages and amounts that each state requires. 

Most states don’t require a high amount of liability insurance, which is why it’s usually beneficial to purchase a higher limit of liability insurance than what is required. 

How much liability insurance do drivers need? 

Drivers must carry the minimum amount of liability insurance coverage required by their state. You can check the amount required in your state by checking the list in the previous section, looking online at the Department of Motor Vehicles (DMV), or asking your insurance company. 

However, bear in mind that the amount you need for liability insurance is not the same as the amount you are required to carry. Oftentimes, the liability amounts are so low that they will only cover minor damage and repairs. If you cause a significant amount of damage, you will still be financially responsible for a large sum if your low amount of liability insurance runs out. 

For example, if your state only requires you to carry $5,000 of property damage liability insurance, you will be under-protected. If you cause an accident that totals someone’s car worth $20,000, you will have to pay the remaining $15,000 yourself. If you are unable to pay the remaining amount, the other driver may sue you for the remaining funds. 

Therefore, you should consider how much you can pay out of pocket after an accident. If you only could afford to pay $5,000 out of pocket, for example, you should choose a higher liability limit. 

The Cost of Liability Insurance 

The average cost of minimum liability car insurance is $44 per month or $528 per year. However, the actual rate you will pay depends upon what state you live in, your vehicle, your driving record, and more. For example, if you need car insurance after a DUI, your average rate will be almost triple the national average. 

Finding the cheapest liability insurance will require shopping around and comparing quotes. Because rates vary so much among different drivers, the only way to know who the cheapest car insurance companies are for you is to compare rates based on your own driving record. 

In addition to getting quotes, you can use the following tips to try and save on the cost of a liability insurance policy. 

• Apply for discounts. There may be car insurance discounts available that you have to apply for, such as safe driving discounts, which can save you money on your auto insurance rates. 
• Choose a car that is cheaper to insure. Some cars are significantly cheaper to insure than others. When shopping for a new car, you should look for one with good safety ratings and replacement parts that are easy to find and cheap. 
• Keep a clean driving record. Because traffic tickets, DUIs, and at-fault accidents will increase auto insurance rates drastically, keeping a clean driving record will help keep your liability insurance rates low. 

Because liability insurance is a requirement, you are stuck paying for it no matter what. However, following the above tips can help you reduce your liability auto insurance rates so that you can afford to purchase more coverage if desired. 

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The Final Word on Liability Car Insurance

Almost every driver in the U.S. will have to purchase a liability insurance policy. Not carrying a state’s required liability insurance will result in fines, loss of driving privileges, and other penalties. However, the cost of this necessary insurance coverage can be reduced. 
One of the best ways to save on liability auto insurance is to shop around online for quotes from different auto insurance companies. To start comparing auto insurance rates today, use our free quote comparison tool. It will help you find the best auto insurance rates available in your area.

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