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What Does Liability Insurance Cover? (2022)

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Car Insurance
Charlie Mitchell

By: Charlie Mitchell

Edited by Jackie Cohen

Last Updated May 10, 2022

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Quick Facts

  • Liability coverage is the cheapest type of auto insurance coverage – many insurance providers offer policies for less than $100 per month.
  • The cheapest states for liability coverage are Hawaii and North Carolina.
  • Liability coverage will typically meet state minimum requirements, but will not offer drivers the most protection on the road.

When we talk about auto insurance, what we mean more often than not is liability coverage. It’s the most important part of car insurance coverage and is required in almost every state. Understanding your insurance coverage is one thing—but knowing you’re getting the best possible insurance rate is the real game-changer.

You can have that peace of mind by using Insurify’s free auto insurance comparison tool. In just a few minutes, you’ll have access to quotes from the best insurance companies in your area. Plus, it’s completely free to use. Compare quotes today.

Cheapest Companies for Liability Coverage

If you aim for the minimum limits, liability car insurance can be pretty cheap—though that’s not always the wise choice. Here are the insurance companies that have the cheapest quotes on liability car insurance:

Insurance CompanyMonthly Quote for Liability Coverage
USH&C$59
21st Century$76
Anchor$76
Amigo USA$76
First Chicago$79
Foremost Signature$82
Acuity$83
Kemper$84
TSC Direct$90
Aspire General$97
Disclaimer: actual quotes may vary based on the policyholder's unique driver profile.

What is liability coverage?

What is liability car insurance?

Liability coverage is a type of insurance that protects drivers when they cause damage to other people's vehicles. In most states, liability insurance is the minimum required coverage and it is often the cheapest type of car insurance coverage.

Insurance is confusing. A lot of people buy liability auto insurance thinking that it protects their car if they get in an accident. But did you know that’s not actually the case?

When you buy the minimum coverage required by your state, which tends only to be liability coverage, you’re protecting yourself from financial responsibility to other people’s bodies and vehicles. As in, if you get in a crash and the insurance company determines that it’s your fault, that’s when your liability coverage kicks in.

Liability car insurance has two basic categories: property damage and bodily injury. If you damage someone’s car in an accident, your insurance pays for the property damage you caused. And if someone hurt in the accident you caused needs medical attention, your bodily injury liability coverage pays their medical bills.

“Wait!” you might say. “What if the accident isn’t my fault? My insurance policy won’t do anything?” In this case, the liability coverage of whoever caused the car accident pays for the property damage and medical expenses. If the person at fault is uninsured or underinsured, you could be out of luck—so consider buying underinsured/uninsured motorist coverage for your policy.

You can also buy insurance coverage that will cover damage to your vehicle and medical payments if you get hurt regardless of who’s at fault. This is additional coverage that’s not required by law and isn’t liability insurance. It can be great to have, but it does make your insurance cost quite a bit more.

Car insurance is complicated, and there’s a little more to it than that, so let’s talk over the types of coverage in more detail.

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How Liability Coverage Works

The way to think about liability coverage is that it kicks in when you’re involved in a car accident and the accident is your fault—as in, you are liable for the damages. Liability insurance helps you pay for things that would normally cause you to go into years of debt or force you to sell your car or house to pay for on your own—unless you have tens of thousands of dollars sitting in the bank.

Here are the basics of auto liability coverage. You should know this through and through before purchasing an automobile insurance policy.

Property Damage Liability Coverage

When a car accident is your fault, it’s on you to pay for the damages you caused to the other person’s property—usually their motor vehicle, but sometimes fencing, landscaping, garages, mailboxes, and the like. That’s what the property damage portion of your liability insurance covers.

Bodily Injury Liability Coverage

If someone is hurt in a car accident you caused, your bodily injury liability insurance coverage pays the medical bills incurred during the accident along with other costs related to someone's personal injuries, such as lost wages and funeral expenses. If you get sued, this auto insurance coverage may cover your legal defense as well.

Coverage Limits

When you buy an auto insurance policy, your liability insurance comes with coverage limits. These limits are the maximum amount the insurance company will pay out to cover damages. After that, you’re on your own. So if you opt for the lowest liability limits, you’ll have the cheapest insurance, but you could be putting your assets at risk.

State Minimum Liability Coverage Insurance Requirements

The state minimum for liability insurance is whatever your state decides is the minimum amount of liability coverage you must carry. The state sets a minimum for bodily injury liability coverage per person and per accident, as well as minimum property damage limits. Some states also require personal injury protection, medical payments, and/or uninsured motorist coverage.

State Minimum Liability Coverage Insurance Requirements

State minimum liability insurance requirements are the minimum limits you can have on your policy and still be legally insured. They typically read in this format:

[bodily injury per person] / [bodily injury per accident] / [personal property]

For example, in Ohio, the state minimum insurance requirements are 25/50/25. That means your liability auto insurance has to have $25,000 in bodily injury liability coverage per person and $50,000 per accident, along with $25,000 in property damage liability coverage.

Other Types of Insurance

It’s really important to remember that liability insurance doesn’t pay for damage to your stuff or your medical bills. If you want to be covered regardless of fault, you will want comprehensive coverage, which covers damage from vandalism, natural disaster, theft, and other such calamities, as well as collision insurance, which protects you and your car when you hit things.

Cheapest States for Car Insurance for Liability Coverage

Car accidents are a lot more frequent in some states than in others. Where damages are less likely to occur, liability car insurance is cheaper. Take a look at the states with the cheapest car insurance with liability coverage:

StateAverage Rate
Hawaii$66
North Carolina$79
Wyoming$82
Vermont$83
South Dakota$85
Disclaimer: actual quotes may vary based on the policyholder's unique driver profile.

Frequently Asked Questions

  • Liability coverage pays for property damage and personal injury that you cause in an accident. It doesn’t pay for damage to your car or your own medical bills. For that, you need collision coverage, comprehensive coverage, medical payments coverage, and/or personal injury protection. In some states, some of these coverage options are required.

  • Yes—and you also have to meet the minimum coverage set by your state. Your insurance agent won’t sell you insurance coverage that doesn’t meet these minimum limits. Your chosen coverage limits should be equal to or greater than your net worth.

  • Insurify is the best way to make sure you have the cheapest car insurance out there. In just a few minutes, you can compare quotes from all over the industry, and even adjust your quotes to the types of coverage and coverage limits you’re looking for.

The Best and Cheapest Liability Coverage

Now that you’re solid on what liability coverage is for, you can start hunting for the cheapest policy. Whatever your coverage needs, you’re going to want compare car insurance rates. And if you use Insurify, in just a few minutes, you’ll have a comprehensive list of free quotes to get you started. The cheapest insurance company will be plain as day.

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Methodology

The car insurance quotes displayed are based on an analysis of Insurify’s database of over 40 million quotes from 500 ZIP codes nationwide. To obtain representative rates, Insurify’s data science team performs frequent comprehensive analyses of the factors car insurance providers weigh to calculate rates including driver demographics, driving record, credit score, desired coverage level, and more.

Insurify’s analysis also incorporates the Insurify Composite Score (ICS) assigned to each insurance provider. The ICS is a proprietary rating that weighs multiple factors reflecting the quality, reliability, and health of an insurance company. Ratings used to calculate the ICS include Financial Strength Ratings from A.M. Best, Standard & Poor’s, Moody’s, and Fitch; J.D. Power ratings; Consumer Reports customer satisfaction surveys and customer complaints; mobile app reviews; and user-generated company reviews. 

With the above insights and ranking methods, Insurify is able to offer car insurance shoppers insight into how various insurance providers compare to one another in terms of both cost and quality. Note, actual quotes will vary based on unique attributes including the policyholder’s driver history and their garaging address.

Charlie Mitchell
Charlie Mitchell
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Content Writer at Insurify

Charlie Mitchell is a journalist, researcher, and copywriter living in Minneapolis. He's contributed to Vox, Mother Jones, The New Republic, and other magazines and websites.

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