North Dakota. Rhode Island. South Carolina. South Dakota. Minimum limits if a driver purchases car insurance, which is optional. Washington, D. West Virginia. Medical bills and car repairs can be incredibly expensive, and a split second could be the difference between a normal day and the beginning of bankruptcy.
For example, say you hit another car, total it and seriously injure four people. Can your liability insurance pay for them? The people you injured can sue you for that money, and you could end up losing your home or, in some states, having your wages garnished.
The more you have to lose, the more they can come after. In general, umbrella policies cover those who have a lot of assets or more opportunities to encounter risk. If you host lots of parties, have an easily accessible pool, keep a bunch of dogs or have rental properties, you might have the sort of risk an umbrella policy is meant to cover. Non-owner insurance is auto liability coverage only, and is appropriate only if the cars you typically borrow or rent belong to someone outside your household.
If an insurer finds out you live with a customer, they may have already added you. This could include injuries to other drivers and their passengers, and damage to other vehicles or civic property. If someone else is to blame for an accident that damages your car, their liability insurance would typically pay for your repairs. Learn more about the average car insurance costs. It depends. ZIP Code. What is liability car insurance? Bodily injury liability coverage.
Property damage liability coverage. Liability car insurance limits. Split liability limits. The coverage covers everyone listed on your policy as a designated driver who operates the covered vehicle. Like all car insurance coverages, bodily injury liability coverage helps protect your assets.
If you do not carry this important coverage, a court could require you to pay for the injuries of another driver from your own pocket. When you cause an accident that injures the other driver or their passengers, you can file a claim with your insurer to help pay the medical costs. The provider will only cover costs up to the limit of your bodily injury liability coverage.
As you can see, bodily injury liability coverage can cover a variety of expenses. However, it will not cover:. Most states require motorists to carry minimum levels of car insurance.
Most require each driver to purchase bodily injury and property damage liability coverages. Some also require all drivers to carry medical payments or personal injury protection coverages, and some states also require car owners to buy uninsured motorist coverage, underinsured motorist coverage or both.
State laws also dictate the minimum levels of liability coverage you must purchase. When you research the compulsory coverages you must carry, you will likely see the requirements described as three numbers, separated by forward slashes. Here is what each number means:. The minimum amounts of liability coverage you must purchase vary by state. Nonetheless, this three-number way of describing the requirement applies to all states. But that is very likely not enough. In fact, required minimum liability limits in all states do not reflect the actual cost of paying for auto accident injuries.
According to the U. That does not include compensation for lost wages or pain and suffering. If the injured driver does not have medical insurance or underinsured motorist coverage, they could sue you to recoup losses. Most major car insurance providers will allow you to increase your coverage to these levels, perhaps even higher.
For maximum protection, purchase a personal umbrella liability policy. An umbrella policy takes over when your car insurance liability coverages hit their limits. Best of all, a single umbrella policy adds an extra layer of liability coverage to your auto and home or renters policies. Some state departments of transportation also feature insurance requirements on their websites.
Local insurance agents should stay abreast of state requirements, but it is always a good idea to research the information on your own before buying car insurance. Claims filing requirements vary by insurer. Some providers allow you to file online or through a mobile app, while others require you to contact a local agent or national claims center. Check the fine print of your auto insurance policy to learn more about how to file a claim.
According to the Insurance Information Institute, U. But this average does not reflect what you will pay for coverage. Insurers determine your car insurance rate based on several factors, including the make and model of your car and your annual mileage, as well as personal factors such as your claims history, credit history, driving record, gender and marital status. Nor do payments you receive under the policy for bail bonds and earnings lost while attending hearings and trials at the company's request.
However, many policies free the company from any obligation to continue your legal defense for sums above the amount it has to pay. You should carry as much liability coverage as you can comfortably afford because damage claims today are sometimes settled for millions.
State minimums don't come close to covering the cost of a serious accident. Ask your agent for precise figures. You may even want to investigate raising your liability coverage further through an umbrella policy. Skip to header Skip to main content Skip to footer.
Home personal finance insurance. Smart Shopper's Guide to Auto Insurance. How much coverage you need You should carry as much liability coverage as you can comfortably afford because damage claims today are sometimes settled for millions. Most Popular. Tax Breaks. February 25,
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