Liability Car Insurance
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What is Liability Insurance?
Liability car insurance helps pay for injuries and damages resulting from a car accident. It comes in two parts: bodily injury/death and property damage. Most states require a minimum level of liability car insurance cover before residents can legally drive on the roads. This is so states aren’t left holding the bag for the expensive costs of car accidents. Liability insurance is part of the six most common types of car insurance.
How Much Does Liability Auto Insurance Cost?
The average annual cost for the minimum required liability auto insurance in the U.S. is $480. Car insurance costs are uniquely individual and based on a wide variety of factors. The most important of those is:
- Where you live – States set their own required minimums and rates.
- Your age – Younger, inexperienced drivers pay more than older drivers.
- Your driving history – A good record means less cost.
There’s plenty more to include, such as what kind of car you drive, are you married or single, your credit history and even your zip code, since people living in the same city can pay different amounts for their car insurance. Some states are making it illegal to consider some of these items, such as credit history and marital status, but in most states, it’s still perfectly legal.
You won’t know how much your liability car insurance quotes are going to cost until you talk to an agent. It’s always a good idea to do some compare car insurance shopping to find the best rates. At Freeway Insurance, we research multiple companies and find the most affordable car insurance for your needs.
How Does Liability Vehicle Insurance Pay Out?
How liability vehicle insurance pays out is determined by whether you live in an at-fault state or a no-fault state. If you live in an at-fault state, your bodily injury liability insurance will help pay for the injuries and damages of the other driver(s) and passengers if you are at fault in a car accident. If you are not at fault, the liability insurance of the driver who is at fault will pay for your injuries and damages. In an at-fault state, your own liability insurance payout will never be applied to your injuries and damages. In a no-fault state, your own liability insurance pays for your injuries and damages, regardless of who is at fault.
These payouts are only up to the liability limits, minus your deductible. If your maximum property damage liability insurance is $25,000 and you cause an accident that totals someone’s brand new Corvette, you will most likely be on the hook for whatever the car is valued at over $25,000.
In an at-fault state, if you are at fault in an accident and you have only the state-required minimum liability insurance, you may be facing costs for the other parties that are left over after your insurance company liability limit. You will be responsible for your own injuries and damages.
In a no-fault state, if your minimum amount of liability insurance cover does not pay for the total of your injuries and damages, you may be left with out of pocket costs. No-fault states often require additional medical insurance in the form of Personal Injury Protection (PIP) or MedPay for this reason.
Many states also require uninsured motorist coverage and/or underinsured motorist coverage as part of their basic requirement package. It will protect insured drivers against hit and run drivers who don’t have insurance at all or not enough to pay for the damage they have inflicted.
At any rate, how much car insurance you choose to buy over the required amount is up to you. A Freeway Insurance agent can help you weigh the pros and cons and make a decision that is best for you and your budget.
How Do I Know Who is at Fault in a Car Accident?
Three authorities typically weigh in on who’s at-fault in a car accident, the police at the scene of the accident, insurance adjusters, and the courts. The courts have the final say if it goes that far, but typically the driver’s insurance company has clear rules to follow in determining fault, and many accidents are not elevated to the courts. Allowing your policy provider to handle claims will help expedite the recovery process. But you do have the right to dispute your insurance company’s decision.
If you do decide to contest your insurance company’s decision, you’ll most likely need to hire an attorney to help you navigate the system.
What Exactly Are Liability Insurance Coverages?
The maximum amount your car insurance company will pay when there’s an accident. You will typically see your state-required liability car insurance expressed by a string of numbers separated by slashes, such as 25/50/25 or $25,000/$50,000/$25,000. Each state* requires a minimum amount of liability insurance coverage to be paid out by the insurance company in the event of a wreck. The above example breaks out to:
- $25,000 of coverage for bodily injury (per person)
- $50,000 of coverage for bodily injury (per accident)
- $25,000 of coverage for property damage (per accident)
Using the above liability limits, if you were at fault in an accident, your insurance would cover the other people in the car accident up to a total amount of $50,000 for injuries and up to $25,000 for damages to their car in an at-fault state. Each injured person will have up to $25,000 medical expense coverage but the total amount for all injuries/deaths will be capped at $50,000 and anything exceeding that would come out of your pocket. In a no-fault state, these coverage limits would be used for your own injuries and damages.
*New Hampshire does not require car insurance.
*Florida does not require bodily injury liability coverage.
How Much Auto Liability Coverage Do I Need?
The short answer is the minimum amount that is legally required in your state, plus some more coverage.
The wise answer is enough coverage to protect you from paying expenses out-of-pocket. Many drivers choose to carry full coverage car insurance for this reason.
When deciding on your coverage amount, you choose how much to protect your finances and assets. Think of it as a protective moat between your money and any claims against you—the greater the coverage, the wider the moat. Asking yourself questions about the risks you are taking, and answering honestly, can help you determine your coverage amount balanced by the premiums you’ll pay.
- How much savings do I have?
- How much are my assets worth, like my house?
- If I only have minimum car insurance, is that enough to protect my savings and assets?
- If I’m injured in an accident and unable to work, how much savings do I have to sustain my lifestyle after paying any out-of-pocket expenses for the accident and my own medical bills?
- Will my health insurance coverage help pay for medical costs caused by a car accident?
Freeway Insurance agents are skilled at helping you decide how much insurance you need for yourself and your budget.
Get Affordable Liability Insurance Quotes Online Today
Liability insurance is essential for any driver and it doesn’t have to be complicated. Freeway Insurance can help you get covered with an online quote, a quick phone call at 800-777-5620, or a helpful visit to an office near you.