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Liability Car Insurance

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 49 of 50 U.S. states and the District of Columbia.

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, Exactly, Is Liability Insurance?

When you’re in an auto accident and are deemed to be the party “at fault,” liability car insurance (or liability coverage, as it’s also known) pays the other parties in the accident when they’re hurt.

Liability coverage also pays for the damage to someone else’s property when it is damaged in an accident for which the insurer is considered “at fault.”

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.

Without More Than Basic Coverage, You May Be Liable For Payment Beyond Your Policy Limits

If you only purchased state minimum liability coverage, you could find yourself legally 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 actually need, contact a State Farm agent.

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

This type of coverage, often referred to as “BI” coverage, pays for the costs associated with injuries for which you are legally liable.

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

Property Damage Liability Coverage

This type of 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.

  • In plain, 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.
  • Thus, your PD coverage will pay for associated bills, such as:
    • Vehicle repair
    • Repair to the living room wall you crashed through
    • 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, PD coverage will pay your defense and court costs.

To fully understand the range of protections offered to you through Bodily Injury or Property Damage Coverage, 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. Nor will it pay for injuries that you personally sustained.

There are separate coverages available for these exposures, including collision coverage and comprehensive 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 State Farm’s umbrella policies 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 by which your premium can be expected to rise if you purchase additional liability insurance also will vary by state.

The increase in your premiums, however, 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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Here to Help Life Go Right®

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