Liability car insurance costs vary depending on what state the driver lives in and other factors like the driver’s age, marital status, and driving history. Each insurance company also has its own rules regarding liability car insurance.
What Is Liability Car Insurance?
Liability car insurance is insurance that covers injury to the other driver and damage to the other driver’s vehicle caused by an accident that you’re deemed responsible for. Auto insurance providers typically sell bodily injury coverage and property damage coverage as a package. If you look at your insurance card, you’ll see three numbers. These numbers, according to Sapling, represent the following:
- The limit for injury to one person.
- The limit for all injuries in an accident.
- The limit for property damage liability.
Imagine that you have to change lanes, something drivers do every day. Only this time, you don’t notice that you’re entering a congested lane, and you run into the car in front of you. That car skids into a lamp post. You get out of your car, and the other driver gets out of their car. The other driver is fine, but their passenger appears to be in pain.
As Money Under 30 points out, your insurance policy will cover the damage to your own vehicle. However, someone also has to pay for the damage to the other vehicle, the damage to the lamp post, and the passenger’s injuries. That’s where your liability insurance comes in. It will cover property damage and medical costs beyond the damage to your vehicle.
Ramsey Solutions notes that if you’re ever responsible for an accident that causes property damages or injuries, and you don’t have liability insurance, you’ll have to pay for repairs and medical care out of pocket. The other driver could sue to have your wages garnished until all damages are paid. Liability insurance is a must-have for all drivers.
Types of Liability Insurance
According to Money Under 30, there are two types of liability insurance. These are:
- Bodily Injury: This type of liability insurance covers the cost of emergency services and continuing medical care if the other driver or their passengers are injured. If the injured party is unable to work, bodily injury coverage also covers lost income.
- Property Damage: This type of liability insurance pays for repairs to the other driver’s vehicle. It also covers damage to fences, walls, lamp posts, and other property.
How Much Liability Car Insurance Do You Need?
ValuePenguin points out that each state has its own liability insurance minimum that drivers are required by law to carry. However, you may want to purchase more coverage than that. It’s possible for the cost of an accident to exceed the minimum coverage limits. If that’s the case, the other driver can go after your personal assets if your insurance policy doesn’t cover all of their costs.
Ramsey Solutions recommends that you purchase at least $500,000 worth of liability coverage, even if your state doesn’t require liability insurance. This coverage should include property damage liability and bodily injury liability. You should have enough liability insurance to cover damage to the other driver’s vehicle, medical bills, and lost wages.
As The Zebra notes, your insurance provider might classify you as an insurance risk if you only carry the state-required minimum of liability coverage. This classification could lead to you having to pay higher rates than drivers who purchase more liability coverage.
How Much Does Liability Car Insurance Cost?
According to The Zebra, drivers can expect to pay, on average, $742 for a six-month policy. That’s $124 a month. However, as Ramsey Solutions points out, several factors can either cause your rates to increase or earn you a discount. These factors include:
- Marital Status: Insurance companies tend to charge married drivers lower rates.
- Vehicle Use: If you use your car for business purposes, you’ll probably need to purchase an additional commercial policy. Personal insurance policies usually don’t cover accidents that happen when you’re using your car for work.
- Out-Of-State Travel: If you frequently drive out of state, you may have to pay higher rates, especially if you get into an accident in a state that has higher minimum requirements than your state of residency.
- Teen Driver: While insurance companies tend to charge parents higher rates when they add their teen driver to their insurance, if your teen driver is on the honor roll or takes driver education classes, they may qualify for a discount.
- Inclusion of Other Drivers: If you add your spouse or another family member to your policy and they have a spotty driving record, you may have to pay higher rates.
- Education: Some insurance companies charge college graduates lower rates.
- Money Owed: You’ll probably have to pay higher insurance rates if you’re leasing your vehicle or you still owe car payments to your lender.
- Home Ownership: Many insurance companies will give you a discount if you own a home, especially if you bundle your home owner’s policy with your car insurance policy.
- Occupation: If you’re a first responder, an active member of the military, or a military veteran, you may qualify for a discount.
- Parking: If you park your car in a garage, your insurance company may give you a discount on comprehensive coverage.
- Theft Prevention: You may qualify for a discount if your car has any anti-theft devices.
- Paperless Statement: Some companies give discounts to customers who access their statements online instead of receiving them in the mail.
Additional Insurance Coverage
In addition to liability car insurance, there are other types of coverage that you might want to add to your policy. According to Ramsey Solutions, these include:
- Medical Payments Coverage: This type of coverage, also known as MedPay, covers medical expenses for you and your passengers, no matter who is at fault for the accident.
- Personal Injury Protection: This type of coverage also pays for medical care, but it’s more comprehensive, has higher coverage limits, and comes at a higher premium than MedPay. Personal injury protection also requires that you pay a deductible, while MedPay doesn’t.
- Rental Reimbursement: If you need to rent a car while your vehicle is in the shop, this coverage will pay the rental costs. Most insurance companies set a limit on how many days of rental use they’ll cover.
Check this out if you need additional information, resources, or guidance on car insurance.
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