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Liability Car Insurance

Amy Danise

Liability car insurance pays others when you cause a car accident. It will pay for the medical bills and property damage to others. Here are important things to know about liability insurance:

  1. Most states require car owners to buy liability insurance. But the minimum required amounts are often low and may not be enough to cover damages and injuries from an accident. Consider buying higher limits, especially if you have assets to protect if there's a lawsuit against you.
  2. Liability car insurance does not pay for any damage to your own car. If you want that type of coverage, buy collision and comprehensive insurance. If you have a car loan or lease, you're probably already required to buy them.

Liability car insurance FAQ

Is car insurance required in every state?

No, not all states require liability insurance. But every state except New Hampshire requires some form of "financial responsibility." In those states, you can skip car insurance and instead post a bond or deposit cash with the state. Most people find it easier to get car insurance quotes and buy insurance rather than give the state about $50,000 or more.

And even New Hampshire requires some form of financial responsibility (like auto insurance or a bond) if you've caused an accident.

Alaska residents who live in areas not connected to roads are not required to register their cars or buy car insurance.

Can I buy liability only insurance?

Car insurance companies will sell you liability only insurance. But if you have a car loan or lease, the lender or leaser usually requires you to also have collision and comprehensive insurance.

What do those liability numbers mean?

Liability car insurance is written as a series of three numbers, such as 100/300/50. Here's what it means:

  • First number: Amount of liability for injuries per person
  • Second number: Amount of liability for injuries per accident
  • Third number: Amount of liability for property damage per accident.
Example: What 100/300/50 means
  • $100,000 for injuries per person
  • $300,000 for injuries per accident
  • $50,000 for property damage

Remember, if you buy liability only insurance, none of those amounts pay for your own medical bills or your own car damage.

What if I don't have enough liability auto insurance?

You can be sued for medical bills and property damage that are more than what your insurance covers. Here's an example of what could happen if you don't have enough insurance.

Consequences of having low coverage for liability car insurance
You have insurance for: You cause a car accident with: You can be sued for:
  • $15,000 bodily injury liability per person
  • $30,000 bodily injury liability per accident
  • $5,000 property damage liability per accident
  • $30,000 in medical bills for one person
  • $15,000 in damage to someone else's car and a fence you hit
  • $15,000 in medical bills
  • $10,000 in property damage

Getting the best deal on liability insurance for your car

Whether you choose to buy only liability insurance or a full coverage car insurance policy, the best way to save money is to shop around. Get quotes from a few companies. Ask your insurance agent to review possible discounts. And try to avoid tickets and accidents.