Updated: June 9, 2025
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Liability car insurance is a mandatory coverage in most states, providing financial protection for injury and property damage to others if you are at fault in an accident.
Liability coverage pays for others' expenses up to your policy limits, but you are responsible for any costs exceeding those limits, making it important to choose adequate coverage levels.
Liability insurance does not cover your injuries, damages to your vehicle, or protection against uninsured or underinsured drivers, highlighting the need for additional coverage.
Liability car insurance policies provide financial protection when you are behind the wheel, especially if you are at fault in an accident. It allows you to file claims that help pay for treatments for others' injuries sustained during the crash. It also covers any property damage to the other party resulting from an accident.
Bodily Injury Liability covers comprehensive medical expenses including emergency room visits, ambulance transport, hospital stays, surgical procedures, ongoing treatment, prescription medications, physical therapy, rehabilitation services, and medical equipment like wheelchairs or crutches. Also provides financial support for:
Property Damage Liability pays for repair or replacement costs for other vehicles, towing and storage fees, and rental car expenses while repairs are completed. Like bodily injury coverage, this follows the insured person and covers costs from minor scratches to total losses. Also covers damage to:
Your liability coverage protects you and your household members whether they're driving your car or someone else's vehicle with permission. Your liability coverage typically extends to:
Coverage gaps can occur if household members aren't listed on your policy or if someone uses your car without clear permission. Liability coverage doesn't protect you from damage to your own vehicle - that requires comprehensive and collision coverage.
If you only carry liability insurance, you'll pay out of pocket for repairs to your car after an accident.Understanding coverage gaps helps you avoid costly surprises when you need protection most.
Liability insurance never covers your medical bills and rehabilitation costs, repairs to your vehicle or replacement costs, rental car expenses while yours is being fixed, or lost wages if you can't work due to injuries. For protection against these costs, you need comprehensive and collision coverage.
You're personally responsible for medical costs exceeding your per-person limit, total accident costs beyond your per-accident limit, property damage above your coverage amount, and legal judgments that surpass your total coverage.
Most policies cover accidents in the United States and Canada, though international travel may require additional coverage. Coverage applies to accidents during your policy period, regardless of when claims are filed.
Liability coverage doesn't apply to intentional damage you cause, commercial use of your personal vehicle, racing or speed contests, damage while committing a crime, or using your car for rideshare without proper coverage.
If an uninsured driver hits you, liability insurance won't help. You need uninsured motorist coverage for protection.
Most states require drivers to have auto insurance coverage — only New Hampshire and Virginia don't. Although the minimum car insurance requirements vary by state, liability coverage is always part of it.
Texas, Georgia, Ohio, Pennsylvania, Virginia, Indiana, Kansas, Kentucky, Tennessee, North Carolina, South Carolina, Alabama, Mississippi, Louisiana, Arkansas, Oklahoma, Utah, Montana, North Dakota, South Dakota, West Virginia
Alaska, Arizona, Connecticut, Maine, Maryland, Massachusetts, Nevada, Oregon, Washington
Liability insurance limits appear as three numbers separated by slashes, like 25/50/25. These represent coverage amounts in thousands of dollars:
Coverage Level | Coverage Per Person | Coverage Per Accident | Propert Damave Protection |
|---|---|---|---|
25/50/25 | $25,000 | $50,000 | $25,000 |
50/100/50 | $50,000 | $100,000 | $50,000 |
100/300/100 | $100,000 | $300,000 | $100,000 |
250/500/100 | $250,000 | $500,000 | $100,000 |
Consider an accident involving three people with medical bills totaling $30,000, $20,000, and $15,000, respectively.
Insurance covers $25,000 for the first person, leaving $5,000 unpaid. The second person's $20,000 is covered, but the third person gets nothing because the $50,000 per-accident limit has been reached. Total out-of-pocket cost: $20,000.
All medical bills are covered since the $65,000 total stays under the $100,000 per-accident limit. Out-of-pocket cost: $0.
Same result as 50/100/50 for this accident - all bills covered with plenty of room for larger claims. Out-of-pocket cost: $0.
Complete coverage with maximum protection for catastrophic accidents involving multiple serious injuries. Out-of-pocket cost: $0.
Getting Liability only coverage put your financial future at risk when adequate coverage costs just $20-30 more monthly than basic limits. State minimums were set decades ago and haven't kept pace with medical costs or vehicle values, creating dangerous coverage gaps that can negatively impact your financial future. Heres why:
Liability car insurance is only one of the many ways to protect yourself, whether you're behind the wheel or not. The best car insurance for you depends on your unique situation. It's best to compare providers and policies to find what matches your needs. The following are some alternative options you may consider:
An umbrella policy protects you beyond the original limits of the insurance plan. For example, you can bundle personal liability insurance with your car, homeowners or renters insurance coverage. This way, you can file a claim if someone's injured at your house — whether your child's friend gets hurt during a playdate or your housekeeper slips while doing chores. A personal liability umbrella policy also protects you against damages if someone sues you for libel, slander, malicious prosecution or mental anguish. Most other plans don't cover these.
Liability car insurance costs less because it provides limited protection. It doesn't cover expenses from damage to your car. A full coverage policy includes comprehensive and collision insurance, which protects your assets. These cover damages from collision-related (motor vehicle accidents) and non-collision-related (vandalism or fallen branches) incidents. Although premiums are more expensive than a liability-only plan, you can still find affordable full coverage car insurance by comparing estimates from various providers.
If you want broader coverage, you may also check out the following options:
While everyone benefits from adequate liability coverage, some people face significantly higher risk that makes maximum protection a necessity, not just a smart choice. Liability insurance is your financial shield against lawsuit-inducing accidents. High-asset individuals, frequent highway drivers, families with teens, and business vehicle users all share one dangerous reality: they're more likely to face catastrophic accidents that generate hundreds of thousands or millions in damages - amounts that quickly surpass standard state minimum coverage
If your net worth exceeds $500,000, you become a more attractive lawsuit target. Attorneys often pursue cases more aggressively when they know substantial assets are available. Homeowners with significant equity, business owners, and high earners should consider 250/500/100 limits plus umbrella coverage to protect their wealth from potential judgments.
Some driving patterns naturally increase accident likelihood and severity. Long daily commutes, especially during rush hour or on high-speed highways, create more exposure to serious accidents. Frequent highway driving increases the chances of multi-vehicle crashes with multiple injured parties and higher damage costs.
Teen drivers face accident rates nearly three times higher than experienced drivers, making them significant liability risks. Even responsible teens lack the experience to handle emergency situations, and their social activities often involve transporting multiple passengers. Higher liability limits become crucial when inexperienced drivers are on your policy.
Families with several vehicles face compound risk exposure. More cars mean more opportunities for accidents, and multiple drivers on the same policy increase the likelihood of claims. Multi-vehicle households should consider whether their liability limits adequately protect against the increased risk of multiple simultaneous claims.
Anyone who uses their personal vehicle for business purposes faces coverage gaps that standard personal liability doesn't address. Real estate agents, contractors, delivery drivers, and rideshare operators need specialized coverage beyond basic liability limits to protect against commercial use exclusions.
Urban drivers face different liability risks than rural drivers. Dense traffic areas increase the likelihood of multi-vehicle accidents with higher damage costs and more injured parties. Drivers in affluent areas may face higher expectations for lawsuit settlements, while those in states with high medical costs or generous jury awards may require additional protection.
Liability-only coverage depends on your state's insurance requirements. In fault states, your liability coverage pays for the other party's damages when you cause an accident. In no-fault states, each driver's insurance covers their own injuries first, regardless of who caused the accident. Your insurer becomes your advocate, managing everything from initial damage assessments to final settlements with injured parties.
The process begins with your insurance company assigning a claims adjuster to investigate the accident details. This professional reviews police reports, interviews witnesses, and assesses all damages to determine the scope of your liability. The adjuster works to establish the facts and calculate fair compensation for the other party's injuries and property damage.
Your insurer then handles all settlement negotiations directly with the injured parties or their representatives. This includes verifying medical bills, calculating lost wages, and determining appropriate compensation for pain and suffering. You're not left to negotiate these complex financial matters on your own.
If someone decides to sue you after an accident, your liability coverage provides legal defense up to your policy limits. Your insurance company assigns experienced attorneys to represent you and covers all court costs and legal fees. This protection can be worth hundreds of thousands of dollars in complex cases.
Your insurer has a strong incentive to defend you vigorously since they're ultimately responsible for paying any judgment up to your policy limits. They'll work to minimize both your exposure and their own financial liability.
Adequate liability limits don't just provide financial protection - they offer psychological relief when accidents happen. Knowing your coverage can handle most reasonable accident scenarios allows you to focus on recovery rather than worrying about financial ruin.
When your limits are sufficient, the claims process becomes much smoother. Your insurer can negotiate from a position of strength, often leading to faster settlements that satisfy all parties without creating personal financial hardship for you.
Filing a car insurance claim can feel overwhelming when you're already dealing with accident stress, but the process is more straightforward than most people expect. Here's exactly what to do:
Immediately after an accident, ensure everyone's safety and call 911 if anyone is injured. Exchange insurance information with other drivers and gather witness contact details. Document everything with photos of vehicles, damage, and the accident scene from multiple angles.
Most companies offer 24/7 claim reporting through phone apps or websites. Provide all the information you gathered at the scene and be honest about what happened - your insurer needs accurate details to represent you effectively.
By responding promptly to adjuster requests and providing any additional information they need. Your policy requires this cooperation, and delays can complicate the claims process. The entire process typically takes weeks to months depending on injury severity and case complexity, but your insurer handles the heavy lifting while keeping you informed of major developments.
Liability insurance costs vary dramatically by state due to different minimum requirements, accident rates, medical costs, and legal environments. Nationally, drivers pay an average of $600 annually for liability-only insurance, though this ranges from as low as $250 in affordable states to over $1,100 in expensive markets. The difference between the most and least expensive states is staggering - New York drivers pay 362% more than Iowa drivers for comparable coverage.
Yes, liability insurance (minimum coverage) is significantly cheaper than full coverage. Based on MoneyGeek's analysis of major insurers, minimum coverage costs an average of $472 per year compared to $884 for full coverage — that's about $34 more per month to add comprehensive and collision.
| USAA | $283 | $614 | $331 |
| State Farm | $409 | $787 | $377 |
| GEICO | $424 | $795 | $371 |
| Nationwide | $462 | $901 | $439 |
| Travelers | $504 | $936 | $432 |
| Progressive | $514 | $985 | $471 |
| Farmers | $572 | $1,045 | $473 |
| Allstate | $604 | $1,008 | $404 |
Comparing car insurance quotes is an excellent and convenient way to get the best deal possible. Securing an online estimate typically involves providing certain information, such as your ZIP code, age range, whether or not you currently have coverage, the number of vehicles you want to be insured, if you're a homeowner, your credit score range, any traffic incidents and whether or not you're a military member. If you're uncomfortable sharing personal details, you may request car insurance quotes anonymously.
MoneyGeek's calculator can also help you get quick quotes from multiple providers. Use this tool to get accurate estimates based on your needs.
MoneyGeek's car insurance calculator will give you a customized estimate of your auto insurance cost. It's free to use, requires no personal information and we won't send you any spam.
Rates updated:
Jun 09, 2025
| Insurance Carrier | MoneyGeek ScoreMG Score | Average Monthly Payment | |
|---|---|---|---|
| 1 |  Capital Insurance Group | 94 /of 100 | $87 |
| 2 |  GEICO | 82 /of 100 | $109 |
| 3 | 83 /of 100 | $118 | |
| 4 | 83 /of 100 | $129 | |
| 5 | 79 /of 100 | $133 | |
| 6 | 77 /of 100 | $151 |
Although MoneyGeek partners with some of the companies we recommend, our content is written and reviewed by an independent team of writers, editors and licensed agents. Learn more about our editorial policies and expert editorial team.
Your driving history has the biggest impact on your liability rates. Insurance companies view your past behavior as the best predictor of future risk. Clean drivers with no accidents or violations pay significantly less than those with tickets, accidents, or serious violations like DUI convictions.
Even minor violations can increase your rates for three to five years, while serious infractions like reckless driving or DUI can affect your premiums for up to 10 years. The good news is that rates typically decrease as violations age off your record, rewarding drivers who maintain clean records over time.
Younger drivers pay substantially more for liability coverage due to their higher accident rates. Teen drivers face rates nearly three times higher than experienced adults, while drivers in their early 20s still pay premium rates. Costs typically decrease as drivers gain experience, with the most significant drops occurring around age 25.
Senior drivers may see slight rate increases after age 70 due to slower reflexes and increased accident risk, but experienced older drivers usually pay much less than young drivers.
Where you live dramatically affects your liability costs. Urban areas with heavy traffic, higher crime rates, and more accidents typically cost more than rural locations. Even your specific ZIP code matters - neighborhoods with higher accident rates or theft claims see higher premiums.
State regulations also play a major role. Some states prohibit using certain factors like credit scores or gender in pricing, while others allow these considerations. States with no-fault insurance requirements or high minimum coverage limits generally have higher baseline costs.
In most states, insurers use credit-based insurance scores to help determine your rates. Studies show a correlation between credit responsibility and claim frequency, though the relationship isn't fully understood. Drivers with excellent credit typically pay less than those with poor credit scores. California, Hawaii, Massachusetts, and Michigan prohibit using credit scores for auto insurance pricing, so this factor won't affect rates in these states.
The car you drive influences your liability costs, though not as much as comprehensive and collision coverage. High-performance vehicles or cars with poor safety ratings may result in slightly higher liability premiums due to increased accident severity risk.
How you use your vehicle matters too. Long daily commutes increase your exposure to accidents, while drivers who only use their cars for occasional errands face lower risk. Annual mileage affects pricing, with high-mileage drivers typically paying more than those who drive less.
Higher liability limits cost more, but the increases are often modest compared to the additional protection. Moving from minimum 25/50/25 coverage to 100/300/100 limits typically adds just $20-30 monthly - a small price for significantly better financial protection.
The company you choose for liability coverage can significantly impact your annual costs. These price variations reflect different business models and target markets. Some companies focus on digital efficiency to keep costs low, while others invest heavily in agent networks and customer service. Companies like USAA can offer lower rates due to their exclusive membership base, which typically includes more responsible drivers.
Unless you can cover a catastrophic car accident with the money you have on hand, purchasing liability insurance is the best way to protect yourself against being sued over a car accident determined to be your fault. Even the necessary amount required by law might not be enough to protect yourself, but by shopping around and speaking to your insurance agent, you can find a cheap car insurance policy that meets your needs.
Smart shopping and taking advantage of available discounts can significantly reduce your liability insurance costs without sacrificing protection.
Start comparing rates two to four weeks before your current policy expires. This gives you adequate time to research options and make informed decisions without creating coverage gaps that could leave you liable for accidents.
Based on national averages, liability-only premiums range from $283 to $604 annually - a $321 difference that makes shopping around essential for finding the best rates. That's a 113% difference between the cheapest and most expensive for identical coverage.
Don't overlook smaller regional insurers when shopping. These companies often offer competitive rates with more personalized service than large national carriers. They may also have different risk assessment models that work in your favor.
Young drivers face the highest liability rates, but costs decrease significantly with each birthday. Drivers in their early 20s see substantial rate reductions as they gain experience, with the most dramatic drops typically occurring around age 25. Maintaining a clean driving record accelerates these savings.
Paying annually instead of monthly eliminates installment fees that typically cost $5-10 monthly - an easy $60-120 annual savings. While liability coverage doesn't have deductibles, if you carry comprehensive and collision coverage alongside your liability protection, increasing those deductibles can lower your overall premium costs.
Consider whether six-month or 12-month policy terms work better for your situation. Some insurers offer discounts for longer terms, while others may raise rates more gradually with shorter renewal periods.
Liability insurance refers to policies that only coverage bodily injury and property damage. In this article, we discussed what a liability-only policy covers, how it works and the average costs to help determine whether this coverage is enough for your needs. Drivers who prioritize cost may find liability car insurance attractive since it's usually the most affordable option. However, it also offers the least amount of protection.
MoneyGeek answers frequently asked questions about liability insurance below to help you make a decision about coverage and find a provider:
No. Liability car insurance covers damages and injuries the other driver sustains if you're at fault. However, it only does so up until your policy's limits.
Repairs and medical treatments can be costly, so ensure you have enough car insurance coverage. Otherwise, you might have to dip into your savings to pay for the remaining amount your policy doesn't cover.
Even if you don't own a car, having coverage is essential if you drive regularly. It ensures financial protection if you often borrow someone else's vehicle or rent one.
However, purchasing a standard car insurance policy may not be the wisest choice. You can inquire with various providers to find cheap non-owner car insurance, which may be the better option.
No, New Hampshire and Virginia don't require it, but Virginia charges an uninsured motor vehicle fee of $500 annually. All other states mandate minimum liability coverage.
No, liability insurance only pays for damage and injuries you cause to others. You need comprehensive and collision coverage to protect your own vehicle.
You're personally responsible for costs exceeding your policy limits. This could result in wage garnishment, asset seizure, liens on your property or forced bankruptcy.
Yes, but only if you own your car outright. Lenders require comprehensive and collision coverage on financed or leased vehicles. Consider whether liability-only coverage provides adequate protection.
Consider coverage equal to your net worth as a starting point. If you have significant assets, high income, or young drivers, consider higher limits or umbrella insurance for additional protection.
No, liability coverage doesn't have deductibles. You don't pay anything out-of-pocket when your liability coverage pays claims for damages you cause to others.
Generally yes, if you have permission to drive. However, the car owner's insurance typically pays first, and your coverage provides secondary protection.
Your per-person limit applies to each injured individual, but your per-accident limit caps total payouts. If you have 50/100/25 coverage and injure three people requiring $40,000 each in medical care, you'd pay $20,000 out-of-pocket ($120,000 total exceeds your $100,000 per-accident limit).
MoneyGeek gathered and analyzed rates using a sample driver profile to determine company averages for the cost of liability-only insurance, how liability-only rates compare to full coverage rates and how rates may change for risky driver profiles (drivers with at-fault accidents and tickets).
Data Sources and Depth
We collected data from state insurance departments and Quadrant Information Services and analyzed 83,056 quotes from 46 companies across 473 ZIP codes.
Sample Driver Profile
To determine overall average annual car insurance rates, we used the following sample driver profile:
We modified this sample profile by age, driving record and car make/model where specified to provide average rates for a variety of drivers.
Coverage Levels Explained
Rates collected were for policies meeting the minimum requirements in a given state or for increased liability coverage. Increased liability coverage refers to a policy with 50/100/50 liability limits, which is shorthand for the following:
You can choose how much liability coverage you want on either a liability-only or full coverage policy. The difference between liability-only and full coverage insurance is the addition of comprehensive and collision coverage. A liability-only policy does not include comprehensive and collision coverage.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
