Liability-only insurance is car insurance that pays for other people’s injuries or damage to other people’s property, but not the policyholder’s injuries or property. The term “liability-only car insurance” is used to distinguish policies with basic coverage from those with collision insurance and comprehensive coverage.
Repairs to/replacement of items in the car during an accident
Repairs to/replacement of other property, like a mailbox, fence, or house
Liability-only insurance is the least expensive car insurance since it provides such minimal coverage. However, driving with only liability insurance can lead to expensive bills for your own property or injuries.
You need enough liability insurance to cover the full value of your assets. Your bodily injury liability coverage should be as much as your net worth, while your property damage liability insurance can be slightly lower since property damage claims are usually less expensive. Purchasing enough liability insurance to cover the value of your assets protects you from financial ruin if you cause a serious car accident.… read full answer
When to Carry Only the Minimum Liability Coverage
Although almost every state requires drivers to carry liability insurance, the minimum coverage is not always enough to cover the cost of an accident. It’s always best to carry as much liability coverage as you can afford, especially if you have a high net worth.
If you don’t have many assets or think the risk is worth it, you might be comfortable with carrying only the minimum coverage. But no matter what, make sure you’re carrying enough insurance to comply with state law and avoid paying fines for driving uninsured.
Liability Limits on Auto Insurance
Liability limits on auto insurance are the maximum amount that your insurance company will pay for injuries and property damage in accidents that you cause. Liability limits are typically written as three numbers divided by slashes.
For example, Arizona’s liability coverage requirements are 50/30/10. That means drivers need to carry $50,000 in bodily injury liability coverage per person, $30,000 in bodily injury liability coverage per accident, and $10,000 in property damage liability coverage overall.
Why You Need More Liability Insurance Than the State Minimum
Your insurance company will never pay for anything beyond the limits of your policy. Using the Arizona example, if you cause an accident that leads to $70,000 in medical bills for the other driver, you will have to pay for $40,000 if you are only carrying the minimum insurance required. And if you can’t afford to pay the full amount, the other driver can sue, and you can have your assets seized or wages garnished to cover the remainder.
If your car is totaled and you only have liability insurance, you will have to pay to replace the vehicle yourself or file a claim with the other driver’s insurance company. Liability coverage alone does not protect your car in any way, just injuries and damage you may cause to others. You need to have … read full answercollision, comprehensive, or new car replacement coverage if you want your insurance company to pay to replace a totaled car. However, if your vehicle is damaged or totaled in an accident that isn’t your fault, you should make a claim on the at-fault party’s property damage liability policy to get your car repaired or replaced.
Only Having Liability Insurance Will Not Cover:
Damage to your vehicle from an accident.
Damage to your vehicle from fire, hail, flooding, fallen trees/limbs, or animal strikes.
Injuries you or your passengers incur.
Theft or vandalism of your vehicle.
On the other hand, collision coverage would help if you cause a run-in with another vehicle or object that totals your car. Comprehensive coverage would apply to damage caused by a fire, storm, or animal encounter, as well as if your car is stolen. Finally, new car replacement coverage would let you recover the full value of a newly purchased vehicle that gets totaled.
How Much Liability Insurance Should You Get in Texas?
Even though Texas only requires 30/60/25in liability insurance, drivers should consider buying more coverage if they can afford it. If you cause an accident that results in damage beyond your policy limits, you will be personally responsible for paying the difference. And no matter what, you should be sure to fulfill the minimum Texas car insurance requirements to avoid facing consequences for driving without insurance.… read full answer
Finally, drivers should also consider purchasing other types of car insurance in order to better protect themselves, given that liability insurance does not provide any coverage for the policyholder’s own injuries or property. For instance, collision insurance covers damage to the policyholder’s car regardless of fault. And comprehensive insurance pays if the policyholder’s vehicle is damaged by something besides an accident, like a natural disaster or vandalism.
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