The Basics of Liability Car Insurance

The Basics of Liability Car Insurance


Whether you’re a new driver or new to insurance, all the different lingo and numbers that get thrown at you can get confusing, fast. That’s why it’s helpful to learn about the different kinds of auto insurance one step at a time.

For instance, liability car insurance isn’t as complicated as it sounds. Let’s break down the basics of liability auto insurance.

What Is Liability Auto Insurance?

According to Bankrate, liability insurance is “a specific type of car insurance that covers injury or damage that you cause in a car accident.” It also covers legal fees in case you are sued in a liability lawsuit.

There are two types: bodily injury liability and property damage liability.

Bodily Injury Liability

If you are at fault in an accident, bodily injury liability covers the cost of any injuries sustained by the other party involved. This could mean medical bills, lost wages and emergency care.

Property Damage Liability

This is pretty much the same, but instead covers the cost of any property that’s damaged as the result of an auto accident you caused. This could include the other person’s vehicle, or their house or fence.

Liability Insurance Jargon

When you purchase liability auto insurance, you’ll hear a lot of numbers being thrown around. Don’t feel intimidated – they’re simpler than they seem at first.

You’ll buy coverage in “limits.” The limit is the maximum amount of money that your insurer will pay. You’ll see three limits when buying liability insurance.

This example from Forbes explains it well:

Your limits might be 10/50/25. The numbers represent coverage amounts in thousands of dollars, such as:

10 represents $10,000 of bodily injury coverage per person.

50 stands for $50,000 of bodily injury coverage per accident.

25 means you’ll have $25,000 of property damage coverage per accident.

If you cause an accident and are sued for more than your limits pay, you might be faced with an expensive bill.

Does Liability Auto Insurance Pay for My Car, Too?

No. Liability car insurance only pays for the other parties in the event of an accident that you cause. If your car is damaged, you’ll need comprehensive and collision coverage.

How Much Does Liability Auto Insurance Cost?

Many factors go into the cost of your insurance. These include:

  • How much coverage you want
  • Gender
  • Age
  • Driving record
  • Claims record
  • Vehicle model
  • Credit
  • Discounts

The best way to get a great deal is to ask for quotes from multiple insurance companies. Then, compare and contrast numbers to see what works best for you.