January 10, 2022

Complete Guide to Liability Coverage

For most states, liability coverage is the minimum auto insurance required.

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The point of state-mandated auto insurance liability requirements is to guarantee that if you get into an accident with someone else and it’s your fault, you’re able to pay for their bodily injuries and property damages. Liability coverage will pay for the cost of the other party’s property damages and bodily injuries in the event of an at-fault accident. While not all states require both bodily injury and property damage coverage, the majority of them do. But is this sufficient?

Liability Coverage

First, let’s go over what liability coverage covers, and whether it’s enough coverage for all of your costs following an incident.

What It Covers

  • Bodily injury liability: Liability coverage includes bodily injuries coverage, which will cover the other party’s bodily injury costs in an at-fault accident.
  • Property damage liability: Property damage coverage will cover the cost of damages to the other party’s vehicle and/or personal property, including repairs or replacement of a vehicle.

What It Doesn’t Cover

  • You and your passenger’s bodily injuries: If you lack medical payments coverage, you’ll have to pay out of pocket for injuries to you and your passengers in an accident you caused.
  • Your property damage: You’ll have to pay for all of your own property damage costs if you don’t also have collision coverage. Liability coverage doesn’t include rolling car or potholes coverage either.
  • Uninsured motorists: If you get into an accident with an uninsured or underinsured motorist and it’s their fault, liability coverage wouldn’t apply to your injuries or damages; you’d need uninsured motorist coverage as well.
  • Lost wages: If you lack collision coverage, your car insurance company won’t reimburse you for wages you lost as a result of an at-fault accident.
  • Damages from events other than collisions: Liability coverage doesn’t cover theft, vandalism, or damage from weather-related incidents. Rather, you’d need comprehensive coverage, which includes hail coverage and flood coverage.

How Liability Coverage Works

If you get into an at-fault accident, liability coverage would pay for the other party’s injuries and property damages up to the limit you’ve selected in your policy. For any costs above the limit, you’ll be responsible out of pocket.

Exceptions and Restrictions

Liability coverage has many exclusions, such as these:

  • Accidents caused intentionally
  • Accidents where you hit your own car or property
  • Accidents with bodily injuries to a family member living in your house
  • Ridesharing or any commercial driving (like if you’re driving to perform a work task for business owners)
  • Catastrophic events like nuclear explosions or biochemical attacks
  • Wear and tear
  • Mechanical/electrical failure or breakdown
  • Tire damage from roads
  • Electronic or custom equipment that you (not the car manufacturer) installed
  • Vehicles that have fewer than four wheels
  • Vehicles that aren’t listed on your policy
  • Vehicles that aren’t designed for public roads, like golf carts
  • Vehicles you used to compete in or prepare for a race1
  • Punitive damages due to malicious acts, recklessness, or gross negligence2

The Cost of Liability Coverage

On average, the annual cost of liability insurance is just short of $600 a year ($596.96). See the averages by state below.

State Average annual expenditure for liability insurance in 2018 (low to high)
North Dakota $307.97
South Dakota $333.44
Iowa $348.87
Wyoming $356.25
Maine $374.59
Vermont $376.99
North Carolina $391.29
Kansas $421.78
Wisconsin $422.28
Idaho $425.89
Nebraska $429.35
Montana $435.81
New Hampshire $436.76
Indiana $442.69
Ohio $448.59
Tennessee $477.07
Hawaii $479.27
Arkansas $486.72
Virginia $492.68
Minnesota $499.48
Oklahoma $508.89
Alabama $511.13
Illinois $515.94
Missouri $520.45
West Virginia $521.74
Mississippi $538.35
Pennsylvania $555.42
Alaska $576.09
New Mexico $576.81
Utah $601.77
Kentucky $611.54
California $616.51
Arizona $646.75
Massachusetts $658.47
Texas $659.47
Colorado $687.40
Washington $689.18
Oregon $689.74
South Carolina $702.37
Maryland $737.73
Connecticut $784.70
Georgia $797.80
Washington, D.C. $809.41
Rhode Island $885.33
Delaware $900.32
Nevada $900.40
New York $920.25
Michigan $952.15
New Jersey $955.93
Florida $1,009.94
Louisiana $1,015.363


Liability insurance is most expensive in Louisiana, which requires a minimum liability of $15,000 for one person and $30,000 for the bodily injuries of everyone in the accident and $25,000 for property damages.4 In this state, you’re legally liable for the other party’s medical bills and physical damages.

How Much Liability Coverage Should You Buy?

How much car insurance do you need? Well, it depends on what state you live in and your personal preferences.

Do You Need Liability Coverage?

The vast majority of states require liability coverage for all registered motor vehicles.

  • Property damages: Every state except New Hampshire and Virginia require property damage coverage.
  • Bodily injuries: Every state except New Hampshire, New Jersey, Florida, and Virginia require bodily injury coverage.

Beyond that, every state has different minimum coverage requirements in terms of limits. See how much liability coverage your state requires in our auto insurance guide.

Liability Coverage Limits

Just because you’ve met the minimum coverage your state requires doesn’t mean it’s sufficient. Here are the average minimum limits in the U.S.:

  • Property damages: About $18,000
  • Bodily injuries: About $26,000 per person or $52,000 per accident

Let’s look at the minimum car insurance in Florida, for example. When it comes to liability coverage, Florida requires property damage coverage only, with a minimum limit of $10,000. This means that if you get into an accident and cause more than $10,000 worth of damages to the other party, you’ll be responsible for paying out of pocket.


In 2018, the latest data year available, the average claim for property damage was $3,841.6

Really, it’s your choice how much liability coverage you get, but we recommend getting more than the minimum coverage your state requires. To minimize your financial risk, set the highest limits you can afford to pay. Once you find an agent, ask how your minimum coverages vary by state and whether it’s a good idea to get additional coverage.

Personal Liability Umbrella Policies 

If you want coverage beyond your liability limits, meet umbrella insurance. You can apply it to these areas:

  • Property damage
  • Bodily injuries
  • Certain types of lawsuits if you’re sued for slender, false arrest, libel, etc.
  • Personal liability

In other words, once you’ve reached your liability limits, umbrella coverage could kick in for added funds.7


At the end of the day, liability coverage only covers the other party’s injuries and damages, not your own. That’s why you’ll want to add comprehensive, collision, and medical payments coverage, at a minimum. We also recommend uninsured motorist coverage. For more information on liability insurance, see our FAQs below.

Frequently Asked Questions

If auto insurance is a house, think of liability insurance as the foundation.

What does liability usually cover?

Liability usually covers the other party’s bodily injuries and property damages in an at-fault accident.

What are the limitations to liability insurance coverage?

These are the limitations of liability insurance coverage:

  • The bodily injuries of you and your passengers
  • Your property damages
  • Collisions with uninsured motorists
  • Damages from weather-related incidents, vandalism, or theft
  • Wages lost as a result of a collision

Does liability cover uninsured motorists?

Liability does not cover uninsured motorists. You’d need uninsured motorist coverage to get reimbursed for injuries and damages if an uninsured motorist hits you or if you’ve been involved in a hit-and-run.

What happens if I only have liability insurance?

If you only have liability insurance, you’d have to pay out of pocket for your injuries and damages in at-fault accidents. You’d also pay out of pocket for car theft, car vandalism, or damage from weather-related incidents, potholes, or rolling cars.


  1. Exclusions: What your policy won’t cover. Nasdaq. (2013, Jun 28).

  2. What are Auto Insurance Policy Exclusions? Simmons and Fletcher. (2022).

  3. NAIC Releases 2017-2018 Auto Insurance Database Report. NAIC. (2021, Mar 9).

  4. Consumer’s Guide to Auto Insurance. Louisiana Department of Insurance. (2022).

  5. Florida Insurance Requirements. Florida Highway Safety and Motor Vehicles. (2022).

  6. Facts + Statistics: Auto insurance. Insurance Information Institute. (2022).

  7. Umbrella Insurance – How it Works & What it Covers. Geico. (2022).