What is liability car insurance?


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UPDATED: 2019-05-29T14:05:46.497Z
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Even if you consider yourself a good driver, the reality is, car accidents can happen to anyone. On average, there are about 17,000 car accidents every day in the United States, and about 6,000 of those accidents include a reported injury. In 2017, auto accidents cost nearly $168 billion dollars.

Not only is liability car insurance required in nearly every state, it’s also critical to protecting you financially in the event you’re found at-fault for a car accident.

If you’re found at-fault for a car accident that damaged someone’s property or injured another driver and/or their passengers, you’d be responsible for compensating the other party. That’s where liability car insurance comes into play.

What is liability car insurance?

Liability car insurance is a type of auto insurance that helps you cover the costs of bodily injuries and/or the property damage caused in an accident you’re found at-fault for. It’s a legal requirement in most states to drive.

What does liability car insurance cover?

Liability car insurance consists of two car insurance coverages:

  • Bodily injury liability: This insurance covers medical expenses incurred by the other driver, their passengers or your passengers, or any pedestrians in a car accident you’re at fault for. In some cases, it could also cover lost wages and lawsuit-related expenses if the injured party sues you for damages.

  • Property damage liability: Liability car insurance also covers property damage in an accident you caused. While the property damage is most often the other driver’s vehicle, this also includes any other property, such as a fence, guard rail or building.

While liability car insurance covers the expenses related to medical treatment and property damage incurred by the other driver or passengers, it does not cover your personal injuries or damage to your vehicle if the accident was caused by you.

In some states, there is a system of “true no-fault” where each of the drivers involved in an accident is compensated by their personal car insurance providers regardless of who was at fault.

What are the different types of liability car insurance systems?

In the U.S., there are four main types of liability car insurance systems, and the type of insurance system that applies to you depends on which state you’re currently in and where the accident occurred.

  • True no-fault: 12 states follow the true no-fault insurance system. In these states, both drivers involved in the collision are compensated by their respective auto insurance companies regardless of who was at fault. Neither of the drivers can sue the other because the ability to sue is removed by law in these states. There are different ‘no-fault’ insurance versions in each state where there are certain conditions that should be met before a driver can sue the other. This is called a “tort liability threshold” where medical bills cross a certain defined amount, or there is a severe disability, death or disfigurement. In states with “true no-fault” system, every driver is required to have a personal injury protection insurance that covers lost wages, medical fees, funeral costs apart from other out-of-pocket expenses.
  • Tort liability: In the “tort liability” system, which a majority of states follow, there are no limitations on lawsuits, meaning if you caused the accident, you could be sued by the other car’s passengers or the driver for pain, suffering and medical costs.
  • Choice no-fault: In a choice no-fault system, drivers can choose between a no-fault insurance policy or tort liability policy.
  • Add-on: In states that follow the “add-on” system, drivers are compensated by their own car insurance company, like in no-fault states, but there are no limitations on lawsuits.

What is the coverage limit of liability car insurance?

The amount the auto insurance company will pay depends on what coverage limit you have for your policy. Each state has set a minimum coverage limit with respect to bodily injury liability and property damage that is mandatory for drivers to purchase. For instance, in Ohio, $25,000 is the minimum amount per person injured while the maximum is $50,000 per accident. In Ohio, minimum property damage cover is $25,000. These are often represented in the following manner: 25/50/25.

In the table below, you can see the minimum liability car insurance needed in each state.

State Minimum liability limits
Alabama 25/50/25
Alaska 50/100/25
Arizona 15/30/10
Arkansas 25/50/25
California 15/30/5 (1)
Colorado 25/50/15
Connecticut 25/50/20
Delaware 25/50/10
Florida 10/20/10 (1)
Georgia 25/50/25
Hawaii 20/40/10
Idaho 25/50/15
Illinois 25/50/20
Indiana 25/50/25
Iowa 20/40/15
Kansas 25/50/25
Kentucky 25/50/25 (1)
Louisiana 15/30/25
Maine 50/100/25
Maryland 30/60/15
Massachusetts 20/40/5
Michigan 20/40/10
Minnesota 30/60/10
Mississippi 25/50/25
Missouri 25/50/25
Montana 25/50/20
Nebraska 25/50/25
Nevada 25/50/20
New Hampshire 25/50/25
New Jersey 15/30/5 (2)
New Mexico 25/50/10
New York 25/50/10
North Carolina 30/60/25
North Dakota 25/50/25
Ohio 25/50/25
Oklahoma 25/50/25
Oregon 25/50/20
Pennsylvania 15/30/5
Rhode Island 25/50/25
South Carolina 25/50/25
South Dakota 25/50/25
Tennessee 25/50/15 (1)
Texas 30/60/25
Utah 25/65/15 (1)
Vermont 25/50/10
Virginia 25/50/20
Washington 25/50/10
Washington, D.C. 25/50/10
West Virginia 25/50/25
Wisconsin 25/50/10
Wyoming 25/50/20

(1) Drivers are able to meet liability requirements with a policy with a combined single limit. Limits vary by state. (2) These limits are for a standard policy. Drivers also have the option of choosing a basic policy with limits of 10/10/5.

However, you can buy additional coverage to ensure you have higher protections against lawsuits, pain and suffering, injuries, and fatalities, particularly if you don’t live in a “true no-fault” state.

Importance of other car insurance coverages

As noted above, liability car insurance only covers other individuals' injuries and other property damage, but it provides no protection for your injuries or for your own vehicle. Because of this, it’s wise to consider purchasing other coverages to have full protection.

To protect your vehicle, you can purchase collision insurance (covers you vehicle in collisions regardless of fault) and comprehensive insurance (covers your vehicle for non-collision damage, such as hail or fire).

If you’re interested in more information on car insurance coverages and purchasing car insurance, we recommend our guide on how to buy car insurance. Or if you’re ready to start shopping, start by checking out which companies other drivers rate as the best auto insurance.


The content on this site is offered only as a public service to the web community and does not constitute solicitation or provision of legal advice. This site should not be used as a substitute for obtaining legal advice from an insurance company or an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter. The comments and opinions expressed on this site are of the individual author and may not reflect the opinions of the insurance company or any individual attorney.

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