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Liability Insurance Coverage

Liability insurance is an essential part of almost every car insurance policy. In fact, drivers are required by law to carry it on their policies in nearly every state.

But, do you know what liability insurance is, or how it benefits you? Do you understand just how much you need? State Farm® is here to help.

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What is Liability Insurance?

Liability car insurance (or liability coverage, as it’s also known) helps pay for the costs of the other driver’s property and medical injuries if you are “at fault” in an accident. Your insurer will pay for the property damage and injuries up to the covered limit.

What does Liability Insurance cover?

There are two types of liability car insurance that companies like State Farm offer, and each covers different items:

Bodily Injury liability coverage

Bodily injury liability coverage, often referred to as “BI” coverage, pays for the costs associated with injuries for which you are legally liable.

  • This means that your actions caused injury to another person and you were found legally responsible for those injuries.
  • Your BI coverage will pay for bills associated to those injuries, such as:
    • Medical expenses,
    • Pain and suffering, or
    • Lost wages.

Property Damage liability coverage

Property damage liability coverage, often referred to as “PD” coverage, pays for damage done to another person’s or company’s property, as well as for the loss of use of that property.

  • This means that your actions caused damage to property (a car, a house, a tree, etc.) and you were found legally responsible for those damages.
  • Your PD coverage will pay for associated bills, such as:
    • Vehicle repair,
    • Repair to the living room wall you crashed through, or
    • Removal of the knocked over tree.

Those are just a few of the bills and costs that could be covered. Also, if you are sued, liability coverage will pay your defense and court costs.

Liability Insurance limits

You can choose the limits of what your insurer will cover as long as it is at least equal to your state’s minimum coverage limits. You would be responsible for any damages above your policy’s limit. You will usually see your limits on your insurance policy as three numbers, such as 100/300/100. If you had a policy with 100/300/100 liability limits, you would be covered for:

  • $100,000 for injuries for each person.
  • $300,000 for injuries total for each accident.
  • $100,000 for property damage for each accident.

To fully understand the range of protections offered to you through Bodily Injury or Property Damage coverage, contact a State Farm agent.

Why should you consider more – rather than less – Liability Insurance?

While most states require drivers to carry basic liability insurance, which offers the minimum coverage limits required by law, it’s a good idea to purchase higher coverage limits than your state requires.

Why? Let’s say you were distracted while backing out of a parking space and you didn’t see a car behind you that happened to be driving by. And then you hit that car, slightly injuring the driver and her passenger.

After an investigation, you’re determined to be “at fault” for the accident. Your auto liability coverage will pay for the damage to the car you hit as well as for the medical bills (and other costs) from the injuries sustained by the driver and the passenger, including pain and suffering, and lost wages.

If the damages you cause exceed the liability limits you have chosen, you could find yourself personally liable for all of the costs due that exceed the amount your insurance policy can pay. If you’re unable to pay those bills, it could result in garnished wages, liens against owned assets and even court fees.

To fully understand the difference between minimum liability coverage and the amount of coverage you may actually need, contact a State Farm agent.

What car Liability Insurance doesn’t cover

If you're responsible for an accident, your liability coverage won't pay to repair your vehicle or for injuries that you sustained.

There are separate coverages available for these exposures, including collision coverage, comprehensive coverage, and medical payments coverage.

Personal liability umbrella policies

There’s another type of liability coverage that can protect your assets (and your financial future) in the event you’re in an accident: a personal liability umbrella policy.

Umbrella policies provide coverage above and beyond what your car liability insurance covers, especially if you’re the target of a lawsuit after an accident involving your car, home or boat.

Learn more about umbrella policies offered by State Farm by contacting an agent.

How much car liability coverage should you have?

The minimum amount of liability coverage you’re legally required to carry varies by state, so the amount your premium may rise if you purchase additional liability insurance also will vary by state.

The premiums increase usually is smaller than you’d expect. And keep this in mind: your monthly premium with additional liability coverage is almost certain to cost you less than what you’d pay if you’re in an accident and you’re not properly covered.

If you decide not to purchase additional liability coverage, you should ask yourself this: “How much can I afford to pay out of my own pocket if I'm responsible for an accident?"

Minor "fender-benders" are often fully covered by the liability coverage minimums set by your state. But it only takes one accident to disrupt life as you know it.

Talk to an agent today about protecting your family and your assets by choosing higher liability coverage, at rates you can afford.

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Like a good neighbor, State Farm is there.®

State Farm has plenty of auto insurance options. You can get an auto insurance quote online, or speak with an agent who'll be happy to help you select insurance products and coverage amounts that are right for you.


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This document contains only a general description of coverages and is not a statement of contract. All coverages are subject to all policy provisions and applicable endorsements, and may vary by state. For further information, please see a State Farm agent.

State Farm Mutual Automobile Insurance Company
State Farm Indemnity Company
Bloomington, IL

State Farm County Mutual Insurance Company of Texas
Richardson, TX