What is liability auto insurance?

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Liability auto insurance pays for injuries and property damage you cause to others in an accident. It’s required in nearly every state, and it’s the foundation of any car insurance policy — the coverage that protects your savings and assets from other people’s claims when you’re at fault.

Liability coverage has two parts: bodily injury liability, which pays for other people’s medical bills and related costs, and property damage liability, which pays to repair or replace what you damage. What it doesn’t cover is damage to your own car or your own medical bills — that requires additional coverages.

💡 Here’s how to make sure a serious accident doesn’t follow you financially for years.

When damages exceed your liability limits, your insurer stops paying — and you become personally responsible for the rest. That could mean wage garnishment, asset seizure, or liens on property.

The good news is the fix is inexpensive. Here’s what to do:

Upgrade to at least 50/100/50. It costs an average of just $121 per year — find your state in the coverage cost table below to see your specific number
Target 100/300/100 if you have assets. This covers $100,000 per injured person and $300,000 per accident — limits that can absorb most realistic injury scenarios without leaving you personally exposed.
Add an umbrella policy for significant net worth. A $1 million umbrella policy costs $150 to $300 per year and covers everything above your auto limits

What is liability auto insurance and why is it required?

Liability auto insurance pays for damage you cause to other people — their medical bills, lost wages, and property — when you’re at fault in an accident. States require it because one serious crash can generate costs most drivers couldn’t cover out of pocket. Without it, victims of at-fault accidents would have no reliable way to recover their losses.

Nearly every state requires liability insurance as a condition of registering a vehicle and driving legally. New Hampshire is the only exception — though even there, drivers must demonstrate financial responsibility after an accident, and insurance is the most practical way to do that.

💡 Liability insurance protects your financial future, not just your driving privileges

If you cause a serious accident without adequate liability coverage, a court judgment can follow you for years — allowing creditors to garnish wages, place liens on property, and pursue assets well beyond what you have today. The purpose of liability coverage isn’t just to satisfy the state’s legal requirement. It’s to make sure that if the worst happens, you’re not personally absorbing a financial catastrophe that could take decades to recover from.

What does auto liability insurance cover?

Auto liability insurance covers other people’s injuries and property damage when you cause an accident. It has two components — bodily injury liability and property damage liability — and in many cases also covers your legal defense if you’re sued.

What does bodily injury liability cover?

Bodily injury (BI) liability pays for injuries you cause to others in an at-fault crash. This includes the other driver, their passengers, pedestrians, cyclists, or motorcyclists you injure.

Covered costs typically include:

Medical expenses — hospital bills, surgery, rehabilitation, and ongoing care
Lost income — wages the injured person can’t earn while recovering
Pain and suffering — compensation for non-economic losses beyond medical bills
Legal costs — if the injured party sues you, your insurer typically provides a legal defense up to your policy limits

“If an accident goes to litigation, liability insurance is absolutely crucial because the insurance company generally provides a legal defense and pays off settlements or judgments up to the limit of coverage,” says Jenna Bailey, founder and lead trial attorney with Bailey Law.

What does property damage liability cover?

Property damage (PD) liability pays to repair or replace property you damage in an at-fault crash. This is most commonly another vehicle, but it also covers fences, poles, guardrails, buildings, and other structures.

Property damage liability typically has no deductible, and it doesn’t cover your own vehicle. To protect your own car after an at-fault accident, you need collision coverage.

💡 Your liability coverage is what protects your assets when someone else files a claim against you — make sure the limits are high enough to actually do that

“Most drivers have $25,000 or $50,000 in liability limits, but a single hospitalization following an accident can quickly reach six figures,” warns Bailey.

If your limits are exhausted by a claim, you’re personally on the hook for the remainder. For drivers with significant assets — a home, retirement savings, investments — reviewing your liability limits at every renewal is one of the most important financial decisions you can make.

How do liability insurance limits work?

Liability limits are the maximum amounts your insurer will pay for an at-fault accident — split into bodily injury per person, bodily injury per accident, and property damage per accident. Limits are written as three numbers, such as 25/50/25. Choosing higher limits reduces the chance you’ll owe money out of pocket after a serious crash.

Here’s what each number in a liability limit means:

Limit format	What it means
25 (BI per person)	Maximum paid for one person’s injuries in a crash
50 (BI per accident)	Maximum paid for all injuries combined in one crash
25 (PD per accident)	Maximum paid for property damage you cause in one crash

Using 25/50/25 as a concrete example: if you injure two people in a crash and each has $30,000 in medical bills, your policy pays $25,000 per person — leaving $5,000 per person as your personal responsibility. The per-accident cap of $50,000 means even if five people are injured, the total payout is capped there regardless of individual limits.

💡 The gap between your limits and real-world claim costs is where the financial risk lives

Serious injury claims routinely exceed $100,000. Vehicle replacements for newer cars can exceed $40,000 to $50,000. If your limits are 25/50/25 and real-world costs are double that, you’re personally responsible for everything above your limits.

Increasing to 100/300/100 is the benchmark most insurance professionals recommend, and it costs significantly less than most people expect — often just a few hundred dollars more per year.

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What are the minimum liability insurance requirements by state?

State minimum liability requirements range from 10/20/10 in Florida to 50/100/50 in North Carolina — a wide range that reflects different state philosophies on driver responsibility. Your state’s minimum is the legal floor. You can always buy higher limits, and most insurance professionals recommend doing so.

Many states also require additional coverages alongside liability — uninsured motorist protection, personal injury protection (PIP), or medical payments coverage. The table below shows both the minimum liability limits and any mandatory additional requirements by state.

State Name	Minimum car insurance limits	Additional requirements
Alaska	50/100/25	Not required
Alabama	25/50/25	Not required
Arkansas	25/50/25	Not required
Arizona	25/50/15	Not required
California	30/60/15	Not required
Colorado	25/50/15	Not required
Connecticut	25/50/25	$25,000 uninsured/underinsured motorist bodily injury per person <br /> $50,000 uninsured/underinsured motorist bodily injury per accident
Washington, D.C.	25/50/10	$25,000 uninsured motorist bodily injury per person <br /> $50,000 uninsured motorist bodily injury per accident <br /> $5,000 uninsured motorist property damage per accident
Delaware	25/50/10	$15,000 personal injury per person <br /> $30,000 personal injury per accident
Florida	10/20/10′	$10,000 personal injury protection
Georgia	25/50/25	Not required
Hawaii	20/40/10	$10,000 personal injury protection
Iowa	20/40/15	Not required
Idaho	25/50/15	Not required
Illinois	25/50/20	$25,000 uninsured motorist bodily injury per person <br /> $50,000 uninsured motorist bodily injury per accident <br />
Indiana	25/50/25	Not required
Kansas	25/50/25	$25,000 uninsured/underinsured motorist bodily injury per person <br /> $50,000 uninsured/underinsured motorist bodily injury per accident <br /> $4,500 per person – medical expenses <br /> $900 per month for one year – disability/loss of income <br /> $25 per day – substitution benefits <br /> $2,000 – funeral expenses <br /> $4,500 – rehabilitation expenses <br /> $900 per month for one year – disability/loss-of-income survivor benefits <br /> $25 per day for up to one year – substitution benefits
Kentucky	25/50/25	$10,000 personal injury protection
Louisiana	15/30/25	Not required
Massachusetts	25/50/30	$8,000 personal injury protection <br /> $20,000 uninsured motorist bodily injury per person <br /> $40,000 uninsured motorist bodily injury per accident
Maryland	30/60/15	$2,500 personal injury protection <br /> $30,000 uninsured motorist bodily injury per person <br /> $60,000 uninsured motorist bodily injury per accident <br /> $15,000 uninsured motorist property damage per accident
Maine	50/100/25	$2,000 per person in medical payments coverage <br /> $50,000 uninsured/underinsured motorist bodily injury per person <br /> $100,000 uninsured/underinsured motorist bodily injury per accident
Michigan	50/100/10	$1 Million of property protection coverage <br /> $50,000 to no limit Personal injury protection
Minnesota	30/60/10	$25,000 uninsured/underinsured motorist bodily injury per person <br /> $50,000 uninsured/underinsured motorist bodily injury per accident <br /> $40,000 personal injury protection per person, per accident
Missouri	25/50/25	$25,000 uninsured motorist injury per person <br /> $50,000 uninsured motorist bodily injury per accident
Mississippi	25/50/25	Not required
Montana	25/50/20	Not required
North Carolina	50/100/50	$30,000 uninsured motorist bodily injury per person <br /> $60,000 uninsured motorist bodily injury per accident <br /> $25,000 uninsured motorist property damage per accident
North Dakota	25/50/25	$25,000 uninsured/underinsured motorist bodily injury per person <br /> $50,000 uninsured/underinsured motorist bodily injury per accident <br /> $30,000 personal injury protection per person
Nebraska	25/50/25	$25,000 uninsured/underinsured motorist bodily injury per person <br /> $50,000 uninsured/underinsured motorist bodily injury per accident
New Hampshire	25/50/25	$1,000 medical payments <br /> $25,000 uninsured/underinsured motorist bodily injury per person <br /> $50,000 uninsured/underinsured motorist bodily injury per accident
New Jersey	35/70/25	$25,000 bodily injury per person <br /> $50,000 bodily injury per accident <br /> $15,000 personal injury protection
New Mexico	25/50/10	Not required
Nevada	25/50/20	Not required
New York	25/50/10	$25,000 uninsured motorist bodily injury per person <br /> $50,000 uninsured motorist bodily injury per accident <br /> $50,000 personal injury protection
Ohio	25/50/25	Not required
Oklahoma	25/50/25	Not required
Oregon	25/50/20	$25,000 uninsured motorist bodily injury protection per person <br /> $50,000 uninsured motorist bodily injury protection per accident <br /> $15,000 personal injury protection per person
Pennsylvania	15/30/5	$5,000 medical benefits
Rhode Island	25/50/25	Not required
South Carolina	25/50/25	$25,000 uninsured motorist bodily injury per person <br /> $50,000 uninsured motorist bodily injury per accident <br /> $25,000 uninsured motorist property damage per accident
South Dakota	25/50/25	$25,000 uninsured/underinsured motorist bodily injury per person <br /> $50,000 uninsured/underinsured motorist bodily injury per accident
Tennessee	25/50/25	Not required
Texas	30/60/25	Not required
Utah	30/65/25	$3,000 personal injury protection
Virginia	50/100/25	$50,000 bodily injury per person <br /> $100,000 bodily injury per accident <br /> $25,000 property damage per accident
Vermont	25/50/10	$50,000 uninsured/underinsured motorist bodily injury per person <br /> $100,000 uninsured/underinsured motorist bodily injury per accident <br /> $10,000 uninsured motorist property damage per accident <br /> (subject to a $150 deductible)
Washington	25/50/10	Not required
Wisconsin	25/50/10	$25,000 uninsured motorist bodily injury per person <br /> $50,000 uninsured motorist bodily injury per accident <br /> $1,000 per person medical payments coverage
West Virginia	25/50/25	$25,000 uninsured/underinsured motorist bodily injury per person <br /> $50,000 uninsured/underinsured motorist bodily injury per accident <br /> $25,000 uninsured/underinsured motorist property damage per accident
Wyoming	25/50/20	Not required

💡 Your state’s minimum isn’t a recommendation — it’s just the legal threshold

Florida’s 10/20/10 minimum means your insurer will pay a maximum of $10,000 per person for injuries you cause — less than a typical emergency room visit. Pennsylvania’s 15/30/5 property damage limit means $5,000 for any damage you cause to other vehicles or property.

These floors were set to ensure some baseline of coverage exists, not to ensure you’re adequately protected. Check the minimum for your state in the table above, then consider how that number compares to the real cost of a serious accident.

Do all states require liability car insurance?

Liability car insurance is required in 49 states and Washington D.C. New Hampshire is the only exception. If a New Hampshire driver causes an accident, they must immediately demonstrate financial responsibility by showing they can cover at least $25,000 per person, $50,000 per accident in bodily injury, and $25,000 in property damage. Failure to do so can result in license and registration suspension until proof is provided.

Most New Hampshire drivers carry insurance voluntarily because meeting that obligation out of pocket after an accident is a significant financial risk.

What liability limits do insurance experts recommend?

We recommend at least 100/300/100 as a baseline — significantly higher than what most states require. This level of coverage provides meaningful protection after a serious accident without a prohibitive premium increase.

Medical bills and lawsuits can escalate quickly, especially when legal representation is involved. A 100/300/100 policy gives you $100,000 per injured person, $300,000 total for all injuries in one crash, and $100,000 for property damage — limits that can absorb most realistic accident scenarios without leaving you personally exposed.

If your net worth is significant — a home, investment accounts, retirement savings — higher limits and an umbrella policy provide additional protection. The umbrella policy picks up where your auto liability leaves off, typically starting at $1 million in additional coverage for $150 to $300 per year.

💡 100/300/100 is the coverage level most worth targeting — here’s how to get there affordably

Start by getting a quote at 100/300/100 alongside your current limits. In most states, the jump from state minimum to 100/300/100 costs $200 to $400 per year — often less than $1 per day. If that’s a stretch, the intermediate step to 50/100/50 averages just $121 per year nationwide and meaningfully reduces your exposure. Either upgrade is almost always worth it compared to the financial risk of carrying minimums through a serious accident.

What happens if damages exceed your liability limits?

When damages exceed your policy limits, you’re personally responsible for the remainder. That means legal expenses, hospital bills, and repair costs beyond what your insurer pays come directly out of your pocket — or can be pursued through a lawsuit against your wages and assets.

Here’s a concrete example. California requires 30/60/15 liability limits. If you cause an accident where the other driver has $40,000 in medical bills, your insurer pays $30,000 and you owe the remaining $10,000 personally. If their car is worth $25,000, your insurer pays $15,000 and you owe $10,000 more. That’s $20,000 in personal liability from a single accident — and medical costs can run much higher in serious injury cases.

Serious injury claims can involve ongoing care, lost earnings over years, and legal settlements that far exceed what most people expect. A judgment from a lawsuit can follow you for years, allowing the injured party to garnish wages, place liens on property, and pursue future assets.

How much does liability car insurance cost?

On average, drivers pay $913 per year for state minimum auto coverage. Liability-only policies are the most affordable type of car insurance because they only cover other people’s losses — not damage to your own vehicle.

What you pay depends on your liability limits, state requirements, driving record, vehicle, location, age, and credit score. Minimum coverage keeps costs low in the short term, but the financial exposure it leaves can far outweigh the premium savings after a serious accident.

How much does it cost to increase liability coverage?

Upgrading from state minimum to 50/100/50 costs an average of $121 per year — or about $10 per month — nationally. In most states, the increase is modest. In a few states with high baseline rates, like Florida and Louisiana, the jump is more significant.

For an average of $121 extra a year, you can significantly decrease the chance of your limits leaving you personally responsible for thousands of dollars in claims after an accident. In states like Maine and Virginia, the upgrade costs less than $15 per year. Even in more expensive states, the protection it provides against a potentially catastrophic out-of-pocket liability is almost always worth it.

State	Average rate state minimum	Average rate 50/100/50	How much it costs to increase coverage	Percent change for increased coverage
Alaska	$588	$605	$17	3%
Alabama	$574	$610	$36	6%
Arkansas	$689	$753	$64	9%
Arizona	$768	$896	$128	17%
California	$897	$985	$88	10%
Colorado	$651	$753	$102	16%
Connecticut	$1,048	$1,130	$82	8%
Washington, D.C.	$918	$1,052	$134	15%
Delaware	$1,300	$1,449	$149	11%
Florida	$1,228	$1,635	$407	33%
Georgia	$860	$964	$104	12%
Hawaii	$477	$549	$72	15%
Iowa	$481	$523	$42	9%
Idaho	$594	$638	$44	7%
Illinois	$527	$579	$52	10%
Indiana	$506	$548	$42	8%
Kansas	$698	$781	$83	12%
Kentucky	$721	$778	$57	8%
Louisiana	$1,033	$1,338	$305	30%
Massachusetts	$789	$882	$93	12%
Maryland	$810	$929	$119	15%
Maine	$469	$478	$9	2%
Michigan	$1,303	$1,390	$87	7%
Minnesota	$852	$903	$51	6%
Missouri	$563	$616	$53	9%
Mississippi	$628	$701	$73	12%
Montana	$521	$570	$49	9%
North Carolina	$681	$681	$0	0%
North Dakota	$564	$608	$44	8%
Nebraska	$515	$585	$70	14%
New Hampshire	$567	$608	$41	7%
New Jersey	$1,395	$1,505	$110	8%
New Mexico	$562	$650	$88	16%
Nevada	$1,212	$1,414	$202	17%
New York	$1,279	$1,451	$172	13%
Ohio	$475	$513	$38	8%
Oklahoma	$585	$637	$52	9%
Oregon	$834	$922	$88	11%
Pennsylvania	$460	$603	$143	31%
Rhode Island	$845	$1,039	$194	23%
South Carolina	$785	$874	$89	11%
South Dakota	$450	$490	$40	9%
Tennessee	$613	$641	$28	5%
Texas	$841	$928	$87	10%
Utah	$850	$916	$66	8%
Virginia	$693	$706	$13	2%
Vermont	$392	$435	$43	11%
Washington	$638	$695	$57	9%
Wisconsin	$569	$680	$111	20%
West Virginia	$587	$720	$133	23%
Wyoming	$339	$367	$28	8%

What does liability auto insurance not cover?

Liability insurance only covers other people’s losses — it doesn’t pay for your own vehicle repairs, your own medical bills, or most incidents outside of standard at-fault accidents. Here’s what falls outside liability coverage and what you’d need instead.

Your own vehicle damage. Collision coverage pays for repairs to your car after an at-fault accident. Comprehensive covers non-collision events like theft, weather, and falling objects.
Your own medical bills. Personal injury protection (PIP), medical payments (MedPay), or health insurance covers your own accident-related medical costs.
Commercial use incidents. If you cause an accident while driving for a rideshare app or making deliveries, standard liability may not apply. Commercial or rideshare coverage is needed.
Racing incidents. Damage caused while participating in any organized race or speed event is excluded.
Intentional damage. Liability only covers accidental damage — any claim involving intentional acts will be denied.

💡 Review your policy for commercial use exclusions if you drive for work — this is a gap that catches many drivers off guard

Standard personal auto policies exclude coverage during rideshare driving, food delivery, and other commercial uses. If you drive for Uber, Lyft, DoorDash, or similar services, you need either a rideshare endorsement or a separate commercial policy to avoid being uninsured during those trips. The cost of that gap — both financially and legally — can be significant if you cause an accident while working.

Frequently asked questions

Does liability insurance cover my car repairs?

Liability insurance doesn’t pay to repair your own vehicle. It only covers damage you cause to other people or their property. To protect your own car from at-fault accident damage, you need collision coverage. For non-collision events like theft, weather, or falling objects, you need comprehensive coverage.

What liability limits should I carry if I have significant assets?

If you have meaningful assets — a home, retirement accounts, investments — carry at least 100/300/100 and consider adding an umbrella policy on top. Higher liability limits reduce the risk of a lawsuit judgment exceeding your coverage and reaching your personal assets. An umbrella policy provides an additional $1 million or more of protection starting at around $150 to $300 per year.

Is 25/50/25 enough liability coverage?

For most drivers, 25/50/25 is not enough. While it meets the legal minimum in many states, medical costs and vehicle replacements can easily exceed those limits in a serious accident. A hospitalization can cost six figures, and a new vehicle can cost $40,000 to $50,000 or more. Stepping up to at least 50/100/50 — which costs an average of $121 more per year — provides meaningfully better protection.

What is the difference between liability and full coverage?

Liability insurance covers damage you cause to other people and their property. Full coverage adds collision and comprehensive insurance, which protect your own vehicle from accident damage, theft, weather, and other covered events. Full coverage is required by lenders if you finance or lease a vehicle.

Do I need uninsured motorist coverage if I already have liability?

Liability insurance only protects others from your mistakes — it doesn’t protect you from theirs. If an uninsured or underinsured driver hits you and causes serious injuries, their liability coverage either doesn’t exist or isn’t enough. Uninsured and underinsured motorist coverage fills that gap, covering your medical bills and lost wages when the at-fault driver can’t. Many states require it alongside liability for exactly this reason.

Can liability coverage pay for legal defense?

In most cases, liability coverage includes legal defense costs if you’re sued after an at-fault accident. Your insurer will typically provide a defense attorney and cover legal fees up to your policy limits. This is one of the most valuable and least discussed aspects of liability coverage — legal defense in a serious injury case can easily cost tens of thousands of dollars before any settlement is reached.

Alisha Ambre

Alisha Ambre holds a Bachelor of Arts with honours in English Literature and Media Studies. She focuses on crafting clear, engaging content that makes complex information feel practical and approachable for everyday readers. When she’s not writing, she’s likely on the volleyball court or immersed in a good video game.

On this page

What is liability auto insurance and why is it required?
What does auto liability insurance cover?
How do liability insurance limits work?
What are the minimum liability insurance requirements by state?
Do all states require liability car insurance?
What liability limits do insurance experts recommend?
What happens if damages exceed your liability limits?
How much does liability car insurance cost?
How much does it cost to increase liability coverage?
What does liability auto insurance not cover?
Frequently asked questions