What are the liability limits on car insurance?

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Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in...

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Chris Harrigan has an economy degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise...

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Reviewed byChris Harrigan
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UPDATED: Feb 25, 2019

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Key takeaways...
  • Minimum car insurance requirements vary state to state
  • Most states require that you carry liability insurance
  • Requesting several quotes from different companies will help you make an educated decision

The breakdown of liability limits varies from state to state, according to the type of coverage that’s selected. There’s a difference between required liability insurance and optional coverage.

Drivers in all jurisdictions in the United States must maintain mandatory minimum liability limits with the exception of New Hampshire.

The most prevalent issues facing drivers of all ages are how liability car insurance affects them if they’re the “at fault” party in an accident. And how much liability coverage is actually needed.

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The Basic Requirements for Liability Limits

Most states require that you carry liability insurance property damage and bodily injury. Optional liability insurance coverage typically include:

  • Collision
  • Comprehensive
  • Personal Injury Protection which is also termed as payments for medical treatment
  • Uninsured motorist coverage (in some states this is mandatory)
  • Accidental death payment

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Understanding Liability Limits

Minimum car insurance liability limits are divided into three sets of numbers. The first number details the limit per person, the second number refers to the limit amount per occurrence and the last number is the liability limit for property damage.

All types of car insurance coverage include individual policy exclusions as well as rights and obligations according to the limitations.

Limitations are based on the amount of the deductibles and the specific type of optional policy coverage that is selected.

Optional liability insurance coverage doesn’t require any minimums; drivers can select as much or as little coverage as needed to protect their assets.

The Importance of Requesting a Rate Quote

If you don’t understand the liability limits, it’ important to understand the basics. Requesting a rate quote ensures that you get the best policy you can afford.

In addition, you need to learn which areas of the insurance policy that can be adjusted to fit your needs.

The key is to receive as many quotes as possible before purchasing a policy. Once you receive the quotes, compare companies to make certain that there is competitive pricing.

How to Make Liability Insurance More Affordable

There are several ways you can lower the cost of your liability policy.

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For instance, you can:

  • Request Higher Deductibles
  • Maintain a Good Driving Record
  • Only Opt for Mandatory Coverage for Older Vehicles with High Mileage
  • Select Company Financing in Order to Benefit from Lower Monthly Premiums
  • Take a State Approved Defensive Driver Safety Course

The costs associated with liability insurance limits vary according to the driver’s individual needs and financial situation. To find out what car insurance discounts are available, request a free rate quote.

Speak to an insurance specialist to receive additional information about policy customizations in order to find the right insurance coverage. A free rate quote will allow you to examine all options that pertain to liability limits.

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Liability Limits Requirements

Many people believe that the state required minimum limits are enough for them. This may very well be the case, but certain drivers will require additional insurance coverage.

Factors that determine the limits include the following:

  • Marital status
  • Credit history
  • Vehicle usage
  • If the driver has multiple driving infractions or moving violations
  • The number of miles that the insured vehicle is driven

Even if you’re driving an older vehicle, you could still qualify to save money on your car insurance. Car insurance rate quotes are free to use and they allow you to make a side by side comparison of different providers.

If you have an older vehicle and plan on trading the car in for a newer model then you can upgrade your basic liability coverage to full coverage at the time of purchase.

Selecting Liability Limits

Liability limits are designed to cover many instances of damages for the insured driver. However, most people do not know that liability insurance also covers legal defense costs if you are ever sued by a third party.

When you’re “at fault” for an accident, liability limits provides monies for all related expenses such as:

  • Nursing Care
  • Rehabilitation Costs
  • Pain and Suffering
  • Funeral Expenses
  • Long Term Hospital or Medical Bills
  • Most Insurance Providers also Cover lost Earnings

Auto Liability Limits Exceptions and Restrictions

Exceptions to legal liability limits are found in states that are classified as “no-fault” states.

The states that fall under this classification are:

  • Colorado
  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • Pennsylvania
  • Utah

This means that each state retains the right to determine who is “at fault” in the event of an accident. The insured driver is responsible to pay their own damages and the insurance company pays for the damages to the third party.

Property damage liability limits are chosen according to the option selected, for policyholders who prefer a split limit, the amount cannot exceed the per person limits.

For policyholders that reside in households with multiple drivers, this may help to qualify for larger discounts with the insurance provider. But, the restrictions are that each vehicle must have individual liability coverage, even if the vehicles are driven by multiple drivers.

Unless otherwise specified free rate quotes will include the minimum limits for liability coverage. Keep in mind that you can request to modify, restrict, or limit the deductible amounts for optional coverage to ensure that you receive an accurate rate comparison.

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References:
  1. https://www.allstate.com/tools-and-resources/car-insurance/what-is-collision-insurance.aspx
  2. https://www.statefarm.com/
  3. https://www.esurance.com/info/car/uninsured-and-underinsured-coverage
  4. https://www.allstate.com/tools-and-resources/car-insurance/liability-car-insurance-cover.aspx
  5. https://www.consumerreports.org/cro/car-insurance/credit-scores-affect-auto-insurance-rates/index.htm
  6. https://www.esurance.com/info/car/insuring-older-cars
  7. http://legal-dictionary.thefreedictionary.com/property+damage

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