What Are The Best Liability Car Insurance Companies In The US?
Whether you’re searching for car insurance for the first time or you’re a veteran simply looking for cheap liability car insurance, understanding how much coverage is mandatory, the exact cost of liability insurance and where to find cheap liability car insurance can leave you feeling overwhelmed.
The different insurance types can sometimes be confusing. Between liability insurance, comprehensive insurance, collision insurance and all the other add-ons, you can be left screaming the question “how much car insurance do I need?”
We’re here to break it all down for you.
What is liability car insurance?
Liability car insurance helps pay for the cost of damages you cause to another person during an accident. This type of insurance is the most basic type of insurance and is mandatory in 49 of the 50 states. Let’s give this liability coverage definition some more context.
Say you’re driving home and ding! you receive a text message. You look down at your phone to see who the text is from and look back up just in time to see that you’re about to hit the car in front of you. You slam on your brakes but Wham! It’s too late. You’ve rear-ended the other car. You know that your insurance will cover damage to your car, but what about the other car?
What do you do now? How much is this going to cost you? This is where liability insurance would come in. Keep reading to find out how liability coverage could help you.
What does liability car insurance cover?
There are two types of auto liability coverage: bodily injury liability coverage and property damage liability coverage.
All states, with the exception of New Hampshire, require that drivers be covered by both types.
- Bodily injury liability coverage (often abbreviated as "BI")
This will cover you if you're at fault in an accident that injures the other person. Bodily injury liability coverage will help pay for their medical expenses.
- Property damage liability coverage (often abbreviated as "PD")
This will cover you if you’re involved in an accident that causes damage to someone else's property. Property damage liability coverage will help pay for the repairs.
Take a look at the table below for a quick summary of what each type of insurance covers.
|Bodily Injury Liability||Property Damage Liability|
|Medical bills caused by injuries (Immediate and ongoing)||Yes|
|Physical or emotional pain suffered||Yes|
|Lost wages or diminished earning capacity caused by accident||Yes|
|Related legal expenses||Yes|
|Damage to vehicle||Yes|
|Damage to homes and other buildings||Yes|
|Damage to structures such as fences, signs, etc.||Yes|
|Business Revenue lost||Yes|
|Related legal expenses||Yes|
The amount that your insurer will help you pay for a covered liability will of course depend on the coverage limits you choose.
Good to know
The limit is the maximum amount that an insurer will pay out in the event of a covered incident. Each state has its own minimum coverage limits for bodily injury liability and property damage liability that drivers must purchase.
What mean the number in state coverage limits for Liability insurance?
Get used to seeing bodily injury and property damage limits packaged together; this is how most insurers will group them. For example:
- 25/50/15 ($25,000 Bodily injury per person limit, $50,000 Bodily injury per accident limit, $15,000 property damage limit)
- 15/30/100 ($15,000 BI per person limit, $30,000 BI per accident limit, $100,000 property damage limit)
You get the idea.
In the second example above (15/30/100) if you’re desperately trying to take an exit off the highway, quickly change lanes and crash into a car, your insurer would cover:
|15 /||30 /||100|
|A max of $15,000 in injuries for each person hurt||A max of $30,000 in bodily injuries cost for the accident||A max $100,000 for property damaged in the accident|
You may only be able to select your coverage limits as a package, rather than being able to set each one individually.
What is minimum liability car insurance by state?
The minimum required liability coverage can differ quite a bit from state to state. The average limit seems to be around 25/50/25 while in other states it can be as high as 50/100/25. In our table below, Indiana only requires 15/30/5, so the range can vary quite a bit.
|California||25/50/25||This is the average range for required coverage. It requires that you be covered for:|
|Indiana||15/30/5||This is one of the states with the lowest requirements at:|
Is liability car insurance the only requirement in all states?
All states require a certain amount of liability insurance with the exception of New Hampshire. It should be noted that although New Hampshire does not require a minimum level of liability coverage, there is a law in this state which holds you responsible for any injury or damages you cause in an at fault accident.
In addition to bodily injury and property damage, most states also require personal injury protection insurance, uninsured or underinsured motorist protection and/or property protection.
Good to know
In most cases, you would not be able to purchase coverage such as collision and comprehensive until you have purchased liability insurance. Liability car insurance is the minimum coverage you must have for your vehicle; it is the baseline.
Here are the states that require more than just liability insurance:
|State||Uninsured Motorist (BI) Required||Uninsured Motorist (PD) Required||PIP Required|
How much liability car insurance do you need?
How much liability insurance coverage you need will depend on your personal situation and the value of your assets. Think long and hard about your situational factors when determining the necessary level of personal liability coverage.
How much do I have in savings? What is my net worth? These are all questions you should ask yourself when deciding how much liability coverage you need and if the state determined minimum is enough.
Remember, any costs that exceed your liability coverage limits are your responsibility and you have to pay them out of pocket. Consider a situation where you are at fault in a crash and you had selected the state minimum liability limits of 25/50/25 for example in California. So, in this scenario, your bodily injury limit person is $25k and the bodily injury limit for the entire accident is $50k. If there are three people in the accident and each has medical bills of $25k, that would be a total of $75,000 in bodily injury costs for the accident. But your insurance would only cover up to the $50,000 limit that you selected.
You would be responsible to pay the additional $25,000 out of pocket. Can you afford it?
What doesn’t liability car insurance cover?
Any damage to your own car, is not covered by liability insurance; this is where collision coverage comes in. Read our article on collision coverage to find out more. Costs associated with your own injuries are also not covered by liability insurance. This coverage will be included in personal injury protection.Read our article on persona injury protectioncoverage to find out more.
Coverages not included in liability insurance:
|Coverage not covered||Details|
|Collision Coverage Insurance|
|Comprehensive Coverage Insurance|
|Uninsured/Underinsured Motorist Coverage|
|Personal Injury Protection (PIP)|
There are other supplemental coverages you may wish to include in your plan to ensure that you are fully covered such as roadside assistance or rental car reimbursement. Be sure that you consider all scenarios when deciding how much insurance to purchase.
What is the cost of liability car insurance?
You’re probably wondering if you can find cheap liability insurance. On average, car liability insurance in the US costs between $450 and $565 per year.
Some state minimums can cost as little as $200, while maximums can go up to around $750. If you aim for somewhere between the state minimum and the maximum that your insurance company offers (on average), you’re looking at a cost of around $670.
|Average State Minimum||25/50/100 Limit||50/100/300 Limit|
Of course, every situation is different and the exact cost of liability coverage will vary from person to person.
When is liability car insurance recommended?
You need liability insurance if you have a driver’s license, drive a vehicle and live in 49 of the 50 states. Each state has its own mandatory liability insurance minimums so you should consult those limits when shopping for liability insurance. It is not recommended to maintain the minimum level of liability car insurance coverage because:
- You are responsible for any difference in cost not covered by your insurance
- You can appear as high-risk to insurance companies, resulting in higher premiums overall
The amount of liability insurance coverage you need will vary depending on the state you live in and depending on demographic factors such as age, driving record etc. Younger drivers are less experienced on the road and are therefore thought of as being higher risk. While the state minimum may only require you keep a certain level of liability coverage, you should seriously consider maxing out your coverage if you are younger and do not have a substantial sum of money sitting in your bank account.
How will liability car insurance affect my overall insurance premium?
The level of liability coverage you select can actually affect your overall insurance premium.
This is because carrying your state’s minimum liability coverage makes you stand out as a higher risk to an insurance company. For example, if you carry only the state minimum of liability insurance, this looks like a red flag for insurers because you pass more risk on to them. This would in many cases, lead to a more expensive premium. However, if you elect to carry high liability limits, you carry some of the insurance company's financial responsibility and risk and could result in a lower premium.
Generally speaking, the increase in your premiums is usually less than you’d expect. Even if you purchase more liability insurance than is required by your state, this will still be cheaper in the long run than if you’re at fault in an accident and aren’t properly covered. Not only would you be on the hook for costs not covered by insurance, but your future insurance premiums will be higher because you would now be seen as a higher risk.
What is the difference between liability car insurance and full coverage insurance?
The main difference between liability insurance and full coverage insurance is that liability insurance covers your liability (costs) in an accident as it relates to other parties’ bodily injury or property damage. Full coverage insurance on the other hand is a combination of different types of coverages which together result in being fully covered in the event of an accident. It includes liability, collision and comprehensive insurance coverages.
Minimum coverage means protecting your vehicle at the legally required level and nothing more.
This is of course different than attempting to ensure that every possible accident scenario is included in your coverage.
But what does this difference mean to your wallet? The cost difference between liability insurance only, and full coverage insurance will vary from company to company, state to state and even from person to person. Read our article “All you need to know about full coverage car insurance” to find out more.
Take a look at our data below for a comparison of liability vs. full coverage average quotes across major and smaller insurance providers.
|Company (least expensive to most)||Average annual rate for full coverage||Average annual rate for minimum coverage|
Looking at the differences in cost, it’s easy to understand why many people will keep only the required minimum level of insurance on their vehicle. However, in determining the level of liability insurance you need, think about the entirety of your financial situation, and your ability to pay any costs not covered by your insurance company.
Since liability insurance by itself doesn’t protect you against all risks, it’s a good idea to combine it with other types of coverage to ensure that your assets are protected in most situations. Remember to ask yourself “what is keeping only the required level of coverage on my vehicle actually going to cost me in the long run?”