Liability InsuranceCompare Car Insurance Rates in 3 Steps
1. Enter Your Zip:Page Overview
Liability insurance helps pay for the costs associated with bodily injuries or property damage that you're found to be legally responsible (or liable) for causing to another person. It doesn't cover the costs of your own injuries or the expenses incurred to your own property.
All states require you to have some sort of financial responsibility coverage in order to drive a vehicle within their boundaries. Some states insist you meet this requirement through auto liability insurance. Others give you the option of bypassing liability insurance if you can provide proof you have enough financial resources to handle the minimum standard set by the state. Depending on your state, you may have to post a bond.
Your liability insurance generally applies to vehicles you own, as well as vehicles you drive with the owner's permission.
Of course, you can buy an auto insurance policy that doesn't include liability protection; you can just have it for collision, comprehensive, uninsured motorist protection, or other forms of coverage.
Still, though, for most drivers, liability insurance is the simplest way to meet any financial responsibility requirements imposed by their state.
If you live in a state that doesn't force you to carry auto liability coverage in order to drive, you might be tempted to try to meet the financial responsibility standards by some other manner.
However, doing so might not be the smartest move.
If you're liable for a serious accident, you may face a lawsuit from the injured party. If the injured party wins, your life savings or your property could be in jeopardy. Even if you or your family are wealthy, the blow from a successful lawsuit could force you to make all sorts of changes to your life. Liability coverage can shield you from most or all of this, especially when it's coupled with an umbrella policy.
Additionally, liability insurance pays your legal defense costs should an injured party sue you.
Liability insurance allows you to handle exorbitant claims or lawsuits in stride. Just make sure you carry an adequate amount of protection; see our bodily injury and property damage articles for more information, or talk to your insurance agent or company.
Being liable for an accident means you're either partly or fully responsible for causing it, depending on how your state's insurance commission defines "liability".
If you're found to be liable, there's a chance your insurance premiums will rise, especially if you've caused other accidents within a short period. Of course, your carrier could also decide just to drop you as a customer, leaving you to find coverage with another provider.
However, most insurance companies offer some sort of "accident forgiveness" policy. While the terms of this practice vary by the provider, it can mean that your insurer will not raise your premium if it's your first or second "chargeable" accident within a certain number of months or years. Or, it may mean your insurer may drop an accident off your record after a specified amount of time has passed (usually resulting in reduced premiums). Usually, the longer you've been a claim-free customer, the more generous your insurer will be.
Once you've been in an accident, notify your insurance carrier or agent immediately. Be sure to provide all the information that's requested, and make copies of everything you send to your company. The exact steps to follow depend on your carrier, but you may be asked to fill out and submit forms, or send a copy of the police report.
While it may be tempting to do so, don't hide or downplay the truth to your insurer. Remember, your insurance company will represent you if the other party files a claim or sues you. And, the only way your provider can fully do its job is if you're cooperative with the information, and tell the full story.
As with many things related to insurance, the term "no-fault" insurance differs depending on where you live.
However, generally this refers to a practice where your insurer will pay you for the losses you incur in an accident, no matter if you were liable for them or not. And, the other party's provider will pay for their costs. In this situations, the insurance companies involved huddle to determine who was at fault, and make their own financial arrangements. No matter what, your insurance company will pay for the damages to yourself and your property.
States that allow no-fault insurance limit the ability to sue over an accident. Again, the restrictions vary by state. However, these limits usually don't apply to property damage, so if you live in a no-fault state, you may want to carry a greater amount of this type of coverage because you can be readily sued. As always with insurance matters, discuss the situation with your agent or provider.
Auto liability insurance is broken down into:
- Bodily injury coverage.
- Property damage.
Each type of coverage comes with a limit on how much of the cost your insurance company will pay. You set this limit by deciding how much you're willing to pay for the coverage. The more you're willing to pay, the bigger the risk your insurer is willing to assume.
Bodily Injury Liability
As the name implies, this covers costs associated with personal injuries. Remember, liability insurance only pertains to the injuries of other people, not your own.
Bodily injury (sometimes referred to as "BI") protection covers all sorts of matters, such as:
- Hospital bills.
- Doctor visits.
- Rehabilitation expenses.
- Long-term nursing care bills.
- Lost earnings due to an accident.
The exact coverage varies by the insurer; please see our bodily injury liability article for more information.
Property Damage Liability
Occasionally called "PD" insurance, this deals with damages you cause to another person's property, such as:
- Street lights.
- Street signs.
- Utility poles.
- Mail boxes.
- Garage doors.
As with bodily injury insurance, the protection given depends on your insurance company; please see our property damage article to learn more.
Property Protection Coverage
While bodily injury and property damage insurance are the two primary types of auto liability insurance, other types of coverages exist, especially for those living in no-fault states.
For instance, Michigan residents must obtain property protection coverage. Also known as limited property damage insurance, this coverage helps pay for damages you incur to fixed or stationary structures, such as parked vehicles, utility poles, or buildings.
In This Section
Other Topics in This Section
- Liability Insurance Requirements
- Bodily Injury Liability Coverage
- Property Damage Liability Coverage
- When To Buy Liability Insurance
- Non Owner Liability Insurance
- Liability Limits
- Liability Investigation
- How To Buy Liability Insurance
- How To Get A Competitive Liability Insurance Quote
- What To Look For In A Liability Policy
- Tips On Working With A Liability Adjuster
- How To Prepare For A Liability Investigation
Insurance Resource Center
- Full Coverage Auto Insurance
- Rental Reimbursement Coverage
- Loan Lease Payoff Coverage
- SR 22
- Emergency Road Service Coverage
- Towing And Labor Coverage
- Mechanical Breakdown Insurance
- Umbrella Insurance
- Uninsured Motorist Coverage
- Underinsured Motorist Coverage
- Personal Injury Protection
- Gap Insurance
- Liability Insurance
- Physical Damage Insurance
- Shop For Insurance Online
- Insurance State Requirements
Auto Insurance Center
- Auto Insurance Policy Basics
- Top Reasons To Buy Insurance Coverage
- Auto Insurance Minimum Requirements
- Buying Car Insurance Basics
- Buying Car Insurance For Teens
- Teen Guide To Car Insurance
- How To Get Car Insurance Coverage With A Learners Permit
- First Time Drivers Guide To Car Insurance
- How To Save Money On Teen Car Insurance
- Common Driving Mistakes Teens Make
- Safe Driving Tips For Teenage Drivers
- Safe Cars For Teen Drivers
- How To Add Teens To Your Auto Insurance Policy
- Tips for Car Insurance Policy Holders
- Types Of Auto Insurance Coverage
- Buying Car Insurance For Seniors
- Senior Guide To Car Insurance
- Extended Insurance Coverage Guide
- How To Get The Most Out Of Your Auto Insurance Coverage
- When To Buy Rental Car Insurance
- How To Cover Vandalism Through Car Insurance
- How To Cover Auto Theft Through Car Insurance
- How To Cover Windshield Repair Through Car Insurance
- How To Cover Accidents With Wildlife Through Car Insurance
- How To Cover Lost Wages Through Car Insurance
- How To Cover Medical Expenses Through Car Insurance
- How To Cover Pet Injuries Through Car Insurance
- How To Avoid Auto Insurance Non Renewal
Commercial Auto Insurance
- Commercial Auto Insurance Requirements
- Commercial Auto Insurance State Requirements
- Federal Motor Carrier Insurance
- CDL Federal Requirements
- Commercial Insurance Filing
- State Commercial Insurance Filings
- Federal Truck Filings
- Intrastate Truck Filings
- Interstate Transportation Filings
- Certificate Of Insurance
- Uniform Carrier Registration Plan
- Types Of Commercial Auto Insurance
- Commercial Vehicle Insurance Discounts
- Multiple Policy Discount For Commercial Vehicles
- Paid In Full Commercial Vehicle Insurance Discount
- Commercial Business Experience Discount
- Commercial Auto Insurance Quotes
- Commercial Auto Insurance Articles
- Who Needs Commercial Auto Insurance
- Types Of Commercial Vehicles To Insure
- How To Save Money On Commercial Auto Insurance
- What You Need For A Commercial Insurance Quote
- Types Of Business Vehicle Insurance
- How To Compare Commercial Insurance Quotes
- How To Get The Most Out Of Your Commercial Auto Insurance Coverage
- Types Of Commercial Trailers To Insure
- Motorcycle Insurance Minimum Requirements
- Types Of Motorcycle Coverage
- Accessory Coverage For Motorcycles
- Comprehensive Physical Damage Insurance For Motorcycles
- Collision Insurance For Motorcycles
- Bodily Injury Liability Insurance For Motorcycles
- Property Damage Liability Insurance For Motorcycles
- Medical Payments Insurance For Motorcycle Riders
- Personal Injury Protection Insurance For Motorcyclists
- Uninsured Motorist Coverage For Motorcyclists
- Underinsured Motorist Coverage For Motorcyclists
- Motorcycle Roadside Assistance
- Motorcycle Insurance Quotes
- Motorcycle Insurance Rates
- Motorcycle Insurance Discounts
- Online Motorcycle Insurance
- Motorcycle Insurance Articles
- Motocross Insurance
- Dirt Bike Insurance
- Moped Insurance
- Trike Insurance
- Scooter Insurance
Auto Insurance Policy Basics
- Auto Insurance Deductible
- Auto Insurance Limit
- Auto Insurance Premium
- Auto Insurance Quote
- Auto Insurance Rates
- Motor Vehicle Report
- Proof Of Financial Responsibility
- Auto Insurance Endorsement
- Auto Insurance Exclusion
- Auto Insurance Rating
- Auto Insurance Code
- Auto Insurance Discounts
- How To Obtain Proof Of Insurance
- How To Change Auto Insurance Providers
- Factors That Affect Insurance Rates
- How To Cancel An Auto Insurance Policy
- When An Accident Happens
- Accident Loss
- Auto Accident Payment Recovery
- Total Loss
- Proof of Loss
- Actual Cash Value
- Lost Wages
- Salvage Vehicles
- How To File An Accident Report With The Police
- Evaluating Personal Injury In Auto Accidents
- First Steps Following A Personal Injury Auto Accident
- When To Seek Medical Attention For Personal Injury
- Protection Against Auto Insurance Fraud
- How To Handle Staged Car Accidents
- Types of Insurance Claims
- Bodily Injury Claims
- Property Damage Claims
- Windshield Claims
- Third Party Insurance Claims
- About Car Insurance Claims
- How Car Insurance Claims Affect Your Auto Insurance Policy
- When To Cover Personal Injury With Auto Insurance
- How Much Personal Injury Protection To Buy
- Supplementing Health Insurance With Personal Injury Protection
- Pain And Suffering In Personal Injury Claims
- Statute Of Limitations And Personal Injury
- Negligence And Determining Legal Liability
- Auto Insurance Claim Settlements
- Auto Insurance Settlements Involving Personal Injury
- Proving Fault In An Auto Accident Personal Injury Case
- Compensation For Auto Accident Personal Injury Claims
- Tips For Settling A Motor Vehicle Accident Claim
- Factors That Affect Compensation In Personal Injury Claims
- Legal Representation For Insurance Claims
- When To Hire A Personal Injury Attorney
- When To Hire A Lawyer
- Personal Injury Attorney Fees
- How To Choose Personal Injury Lawyers
- Benefits of Hiring A Personal Injury Attorney
- What To Submit To A Personal Injury Attorney
- Processing Car Insurance Claims
- How Car Insurance Companies Handle Claims
- How Car Insurance Companies Investigate Accident Claims
- How To Document Auto Accident Damage
- When To Report An Auto Accident To The DMV
- Tips On Documenting Personal Injury Expenses
- Paying Medical Bills Before Receiving Personal Injury Compensation
- Wage Loss In Personal Injury Auto Accident Cases
- How To File A Loss Of Wages Auto Claim
- Stages Of A Personal Injury Case
- Filing Car Insurance Claims