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 Mathematics.

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Chris Harrigan has an economic 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 to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Sep 14, 2020

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Key takeaways...

  • Limited liability is one of the least expensive types of car insurance
  • If you cause an accident, liability will pay for the damages to the car
  • Liability does not cover damages to your own vehicle

What is liability car insurance and what does it mean if you have it?

What are the advantages and disadvantages? Knowing the facts before you buy insurance protects you and other drivers.

Enter your zip code above in our FREE comparison tool today!

Table of Contents

Why do you need insurance?

Let’s start with why you need car insurance. To begin with, it is often mandatory, so you will save yourself from getting tickets and violation expenses.

But practically, it is necessary because you never know when you may be in an accident.

If you are responsible for the accident, you are held financially, as well as legally, responsible.

This means that anyone involved in the accident will have the right to file suit to compensate for damages.

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Definition of Liability Car Insurance

When you are responsible for an accident involving your car, liability car insurance covers any bodily injury or property damage caused to another person.

It does not cover any of your bodily injuries or damage incurred to your personal property.

For this reason, it is often referred to as “liability only” insurance.

It may also be referred to as “limited” liability insurance, because the insurer will pay up to the coverage limits you have selected, in your particular policy.

What does liability insurance cover?

Liability car insurance covers basically three aspects of one policy. These three aspects will always come together, so purchasing them separately is impossible.

The three main inclusions are:

  • Bodily injury per person
  • Bodily injury per accident
  • Property damage liability

When you are responsible for an accident, this covers injuries caused by the accident, as well as lost wages. The coverage is limited to what you have chosen in and for your policy.

For example, your policy may cover up to a $15,000 limit in bodily injury per person involved in an accident.

This covers the same as the bodily injury per person inclusion but sets a maximum limit on the reimbursement for an entire accident.

This covers any damage you incur to another person’s property when you are responsible for the accident.

Once again, limited liability insurance does not cover damages to your own property.

What does bodily injury cover?

The bodily injury inclusion coverage will help protect you from bills and expenses.

Here are some expenses that you will be covered for:

  • Cost of medical bills for the other party
  • Reimbursement for loss of income to the other party
  • Cost of emergency services at the site of accident
  • Legal defense payments, in case any drivers listed on the policy are involved in a lawsuit caused by a car accident
  • Funeral costs

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What does property damage cover?

The property damage inclusion coverage will help protect you from bills and expenses.

These bills and expenses include:

  • Vehicle repair or replacement costs
  • Damage incurred to structures, such as homes or storefronts
  • Costs covering repair or replacement of other stationary objects

What are the advantages of liability car insurance?

Limited liability is one of the least expensive types of car insurance.

It offers protection for you against high expenses in case of an accident. It also provides protection for you in case of a lawsuit.

What are the disadvantages of liability car insurance?

The coverage of limited liability is minimal.

While it protects you from expenses incurred in injury to others, it provides no coverage for your injuries or damages to your personal properties.

Liability car insurance doesn’t protect your car from other misfortunes, such as vandalism, weather, and damages from other sources.

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Factors to Consider When Choosing a Policy

Consider how much you can afford to pay for a deductible. This will help you to better determine which policy is right for you. Buy the highest limits you can comfortably afford.

In a serious accident, your expenses could be far greater than your coverage limits.

Therefore, it makes good sense to cover as much as you can afford.

You should be aware of and refer to your state’s mandatory minimums when choosing a policy so that you purchase what is required of you legally.

Comparing Liability Car Insurance Policies

Once you’ve researched the factors involved in the kind of policy you wish to choose, the next thing to do is to compare rates from quality insurers.

The best and easiest way to do this is to use an online policy estimate comparison site.

By doing this you can be easily matched with competitively priced quotes from high-quality liability insurers.

Comparing the quotes can be simplified by paying attention to the details in the different quotes.

It is a good idea to look at the overall premium, then break it down into the smaller coverage details.

But if you are still only considering, and not yet firmly set on that company, you can still compare rates: either via your own hard research or by comparing your personally searched rates to those on a comparison site.

Enter your zip code below to receive and compare affordable car insurance quotes for FREE!

References:

  1. https://www.allstate.com/tools-and-resources/car-insurance/liability-car-insurance-cover.aspx
  2. https://www.libertymutual.com/auto/car-insurance-coverage/bodily-injury-liability
  3. https://www.esurance.com/info/car/bodily-injury-and-property-damage-coverage