What Is Auto Liability Insurance?
Auto liability insurance is essential for car owners. It covers damage to others’ property or injuries if you’re at fault in an accident. While it’s required by many states, it may also act as a financial safety net. Let’s break down what it covers and why it’s important.
What does liability insurance cover?
At its core, auto liability insurance consists of two main types of coverage: property damage liability and bodily injury liability.
Property damage liability coverage
Property damage liability coverage helps pay for the repair or replacement of another person’s property that you damage in an accident. This may include a variety of situations, such as:
- Damaging someone’s car in an accident you caused
- Colliding with stationary objects, like a mailbox or a building
While property damage liability covers damage to someone else’s property, it doesn’t cover your own vehicle or property. So, if you’re in an accident and damage your own car or property, this coverage won’t help with repairs. You would need to rely on other types of car insurance coverage, like collision, for that.
Bodily injury liability coverage
Bodily injury liability coverage protects you from the financial responsibility of causing bodily harm to others in an accident. This can include:
- Medical expenses for injuries and pain and suffering sustained by other drivers, passengers or pedestrians
- Lost wages if the injured person is unable to work due to the accident
- Legal costs if the injured party decides to sue for damages
Bodily injury liability coverage doesn’t cover your own injuries. If you’re hurt in an accident, you’d need additional coverage like personal injury protection (PIP) or medical payments coverage, depending on your state’s laws.
Do I need liability car insurance?
The simple answer is yes – almost every state requires drivers to have some level of liability coverage on your auto insurance policy. Each state has different minimum coverage requirements, but these minimums might not provide enough protection in the event of a serious accident.
For example, if you’re involved in an accident where the damages exceed your state’s minimum liability limits, you could be left paying out of pocket for the remaining costs.
Check your state minimums and consider increasing your liability coverage to meet your financial needs.
Understanding car liability coverage limits
When it comes to liability car insurance coverage, one of the most important parts to understand is your coverage limits. These limits define the maximum amount your insurance will pay out for a covered claim. Typically, liability car insurance uses split limits, which means your total liability coverage is split into three different categories.
Amica recommends at least 100/300/100 for your auto liability coverage. Here’s what these numbers mean:
- $100,000: The maximum limit for bodily injury coverage per person
- $300,000: The maximum limit for bodily injury coverage per accident
- $100,000: The maximum limit for property damage coverage per accident
For example, let’s say you’re involved in a car accident with the following damages:
- A pedestrian suffers injuries that amount to $90,000 in medical costs.
- The damage to a parked car is estimated at $20,000.
With a 100/300/100 policy, your insurance would cover the $90,000 in medical expenses for the injured pedestrian under the bodily injury liability limit and the $20,000 for car damages under the property damage liability limit.
Liability coverage can also be shown as a single limit, which means you’ll see one limit on your declarations page. This single limit would apply to both bodily injury and property damage claims combined, up to the maximum coverage amount.
How to choose car liability coverage limits
When choosing auto liability coverage limits, it's important to look beyond just the state minimum requirements. Any expenses that exceed your liability limits will need to be paid out of pocket, so increasing your coverage could be a wise decision.
If you have assets you want to protect – like a home, savings or other valuable possessions – an umbrella insurance policy can provide an extra layer of coverage that may apply once you’ve exceeded your car insurance liability limits.
Customize your auto insurance for complete protection
While auto liability insurance is a necessity, there are additional coverage options that can further protect you and your finances in the event of an accident. These include:
Collision Coverage: Helps pay for repairs if your vehicle is damaged in a collision.
Comprehensive Coverage: Also referred to as other-than-collision coverage, it helps cover damages from incidents like theft, vandalism or natural disasters.
Personal Injury Protection Coverage: Covers medical expenses and lost wages, regardless of fault in an auto accident.
Medical Payments Coverage: Pays for your medical expenses or those of your passengers following a covered auto accident.
Uninsured/Underinsured Motorist Coverage: Provides protection if you're involved in an accident with a driver who doesn’t have sufficient or any insurance.
Common questions about auto liability insurance
If you’re caught driving without liability insurance, you could face fines, license suspension and possibly legal consequences. Additionally, you would be personally responsible for any damages caused in an accident, which could lead to significant financial strain.
In some cases, your liability car insurance will extend to rental cars, but prior to renting a vehicle, you should check with your insurer to confirm. Some rental companies also offer insurance for an additional cost.
Yes, you can always increase your liability coverage limits to provide more financial protection. It’s a good idea to review your coverage periodically to make sure it aligns with your needs.
Generally, if you have permission to use a vehicle, then insurance follows the car. This means that if you're involved in an accident while driving someone else's car, their insurance will serve as the primary coverage. If the accident results in damages that exceed their liability limits, your own insurance may provide secondary coverage. If you have questions about your specific situation, it's best to check with an Amica representative or your insurance provider to ensure you're fully covered.
Your Policy, Policy Declarations or Amended Declarations in effect on the date of loss is the primary source of reference for your coverage, coverage limits and deductible amounts.
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