Liability Insurance: What It Covers & What You'll Pay
Liability insurance pays for injuries and property damage you cause to others in an at-fault accident — it's legally required in almost every state and typically the largest portion of your auto insurance premium.
Find Carriers That Accept PointsWhat Is Liability Insurance Insurance?
Liability insurance has two components: bodily injury liability covers medical bills, lost wages, pain and suffering, and legal fees if you injure someone in an accident you cause. Property damage liability pays to repair or replace the other driver's vehicle, fence, mailbox, or other property you damage. Once your liability limits are exhausted, you're personally responsible for any remaining costs.
Who Needs Liability Insurance Insurance?
Liability insurance is legally required in almost every state except New Hampshire and Virginia (which charges an uninsured fee). If you have points on your license, you're statistically more likely to cause another accident, which makes liability coverage even more critical — you cannot afford the out-of-pocket exposure. Drivers with assets like a home, savings, or wages worth garnishing should carry limits of at least 100/300/100 or 250/500/100, as lawsuits routinely exceed state minimums.
Start with your state's minimum, then calculate your financial exposure. If your violation was serious (DUI, reckless driving, at-fault accident), insurers already consider you high-risk — higher liability limits cost relatively little more because the base rate is already elevated.
How Much Does Liability Insurance Insurance Cost?
- Your ZIP code and state — Michigan, Louisiana, and Florida have the highest liability costs due to lawsuit trends and medical costs, while Idaho, Maine, and Vermont are typically lowest.
- Your age and driving tenure — young drivers under 25 pay significantly more, but that penalty compounds with points; a 22-year-old with a speeding ticket may pay double what a 45-year-old with the same ticket pays.
- Annual mileage and vehicle use — higher mileage increases your liability exposure and premium, especially if you commute in heavy traffic where rear-end accidents are common.
