Car insurance liability

Car insurance liability is a policy type that pays for bodily injury or property damage you cause to others in an auto accident, as required by state law; all 50 states except New Hampshire and Virginia mandate minimum liability coverage, such as $25,000 per person and $50,000 per accident for bodily injury in Texas. Liability coverage only compensates third parties–your damages and medical bills require separate coverage types like collision or personal injury protection.

State-mandated minimums vary; California requires $15,000 per person and $30,000 per accident for injuries, while Alaska mandates $50,000/$100,000. Failure to carry liability insurance can result in fines up to $5,000 or license suspension as experienced in New York and Illinois.

Liability policies commonly split into two parts: bodily injury liability covers medical expenses or lost wages for others hurt in the crash; property damage liability covers repair costs for vehicles, fences, or mailboxes you hit. Some insurers–like GEICO and State Farm–offer higher limits up to $500,000 for added financial protection.

Liability insurance does not cover intentional acts or criminal behavior such as street racing accidents according to every major provider’s exclusions list. Policies define covered drivers specifically and may deny claims if an excluded driver caused the loss, according to a report from YourInsuranceInfo.

Accidents involving multiple at-fault drivers follow comparative or contributory negligence rules: Florida uses pure comparative fault, while Alabama employs contributory negligence which bars recovery if you’re even 1% at fault. Policyholders must promptly notify insurers after an accident or risk claim denial under typical contract terms used by companies such as Progressive and Allstate.

Liability insurance rates depend on driving record factors–drivers with DUIs pay up to 60% more than those with clean records according to National Association of Insurance Commissioners (NAIC) reports.