How Does Liability Car Insurance Work After a Car Crash?

According to the AAA, about 254.5 million people drove in 2022. Due to the high number of drivers, the U.S. requires motor vehicle owners to acquire liability car insurance coverage.

Liability insurance protects you by covering the other driver’s bodily injury losses and property damage if you’re found at-fault for a car accident.

State and federal laws (excluding New Hampshire) force every driver operating a motor vehicle to have liability car insurance. If you don’t have liability insurance, your medical bills, property damages, lost wages, emotional distress, etc., may not be compensated.

The amount liability insurance covers varies per state, and it may be confusing to track during the crash. If another person hit you and you weren’t at-fault, negotiate with insurance companies to cover yourself through other drivers’ liability insurance.

It’s important to retain the right legal help while you negotiate with insurance companies, and that means calling an auto accident attorney.

What is Liability Car Insurance Coverage?

Liability car insurance is a required form of coverage that pays for the other drivers’ damages if you’re found at-fault for a crash. Your liability car insurance policy decides how much is covered for the other party.

You can either opt into your state’s minimum liability coverage amounts, but that may not be enough for serious accidents.

If the at-fault driver’s liability car insurance runs out, they’ll have to pay out-of-pocket for the difference they owe the victim.

If the other party chooses not to pay the difference, the victim may sue for damages and pursue compensation. This may place a lien on the at-fault driver’s property, suspend their license, and other punishments.

What Does Liability Car Insurance Cover?

Liability car insurance covers two main categories: property damages (PD) and bodily injuries (BI) coverage.

Property damages are personal possessions like vehicle damages, miscellaneous, buildings, etc. Bodily injuries cover hospital expenses, prescriptions, lost income, or pain and suffering.

Property Damage Coverage

All possessions the victim owned that were damaged by the at-fault driver may be covered by liability auto insurance, like:

• Repair costs for their damaged vehicle
• Paying for a rental car when their vehicle is getting fixed
• Damaged buildings, poles, fences, or any public and personal structures
• Legal costs if they are suing for property damages
• Any miscellaneous possessions such as phones, bags, wallets, IDs, etc.

The at-fault party must use their liability insurance to cover property damages based on their policy.

Property damage coverage varies by state but ranges from $5,000 to $30,000. Depending on your state laws, you may choose to pay for the minimum coverage, but that may result in you paying out-of-pocket costs.

Bodily Injury Coverage

This form of coverage includes the other driver’s physical or mental injuries if you’re found at-fault for a crash. Bodily injury coverage includes:

• Hospital expenses
• Medications or over-the-counter medicine
• Rehabilitation or therapy costs
• Loss of income
• Pain and suffering
• Legal costs for suing the at-fault party

Premiums for bodily injury coverage may vary by state laws, but it’s required to carry a minimum of $25,000 per person/$50,000 per accident.

You may increase your premiums so you don’t pay out-of-pocket costs depending on your policy. The most common minimum is at least 50/100/50 ($50,000 per individual, $100,000 per accident, $50,000 per incident in property damages).

What Does Liability Insurance Coverage Not Cover?

Liability insurance coverage does not cover your vehicle repairs or injuries if you were at-fault in an accident. For your own injuries, you need to purchase additional coverage such as:

• Collision insurance—regardless of who is at-fault, you’ll acquire compensation for your vehicle repairs, substitute, or newly acquired cars.
• Comprehensive coverage—recover damages for incidents outside of car crashes such as extreme weather conditions, theft, vandalism, fires, etc.
• Med Pay coverage—additional insurance to cover medical costs and funeral expenses.
• Personal injury protection (PIP)—a form of insurance commonly offered in no-fault states that covers medical expenses, lost wages, hitting animals, and funeral fees. PIP kicks in regardless of who caused the accident.

If you’re adding additional coverage to protect yourself when liability coverage isn’t enough, talk to your insurance company for more information.

If your accident falls within your liability car insurance limits, here’s what info you need to collect after an accident.

What Info Do You Need for a Liability Car Insurance Claim?

If you were involved in an auto accident, here are steps to take and what to do after:

1. Call an ambulance if anyone was harmed during the accident. Most states require you to call the authorities if anyone was hurt.
2. Gather contact information from the other parties involved in the accident. You’ll need that info to build up your case. Don’t say anything unnecessary or apologize after an accident as it may affect your liability.
3. Record evidence such as photos and videos of damages, the scene, the surroundings, their other parties drivers license, license plate, and insurance card.
4. Ask for a police report because insurance companies treat this as an objective form of evidence for your claim.
5. Report to your insurance company first (the day of if possible) and have your policy number ready. Explain the necessary situation to your insurer.
6. If you suffered injuries and you weren’t at-fault, contact an auto attorney to help you through the legal process. You may qualify for damages to mitigate your losses.
7. Contact the other party’s insurance if there is a clear indication of you not being at-fault for the accident.

After reporting an auto claim, you may schedule an inspection for your car’s damages and have your vehicle repaired.

Document all expenses and save receipts for all injuries and damages sustained during the accident. Don’t close your claim too early because the insurance company won’t pay further fees if you preemptively settle.

Is it Mandatory to Carry Liability Insurance on Your Vehicle?

Yes, it’s mandatory by law to carry liability insurance on your vehicle. The police will use this as proof of evidence that you were covered by insurance at the time of accident.

The consequences of not having insurance in your vehicle can result in heavy fines, license suspension, and other legal problems.

How Much Liability Insurance Do You Need?

The minimum liability varies by state, but the most common is $25,000 in bodily injury per person and $50,000 in bodily injury per accident. The cheapest liability in the U.S. is Florida with a minimum of $10,000 in property damages and $10,000 in personal injury protection.

The higher the premiums, the less you’ll pay in out-of-pocket costs to the other party if you were at-fault in the accident.

How Much is Liability Insurance for a Car?

The cost of your liability insurance depends on your state, driving history, age, gender, vehicle type, etc. It may also depend on the insurance company you sign up for.

The average cost of liability car insurance in the United States varies depending on your state, but it often stays below $200/month. Contact your insurance company and see what premiums and rates work for your budget.

Why is Liability Insurance Higher on New Cars?

Liability insurance is higher in newer cars because their value is high and can experience fast depreciation—a decline in the value of assets. Insurance companies have to spend more money repairing a new car than a used vehicle, necessitating a higher policy.

Also, insurance companies would consider the vehicle’s MSRPs, safety features, repair costs, parts availability, and other factors.

Liability Car Insurance vs. Full Coverage

Liability car insurance is a requirement whereas full coverage is not by state laws. However, some companies require full coverage for leasing or financing a vehicle.

Full coverage is a generic term for liability auto insurance and other types of insurance in a package (collision, Med Pay, comprehensive, or PIP).

Will Premiums Increase if You File for a Liability Insurance Claim?

Premiums may increase if you file a liability insurance claim, especially if you’re the at-fault party.

On the other hand, if you’re the victim, premiums may increase, but not as much as if you were at-fault. This also depends on the severity of your car accident claim. The higher the risk factor, the more impact your premiums may sustain.

Also, filing multiple claims in a short period may increase your premiums substantially and make it problematic to find insurance coverage at a reasonable rate.

Find an Expert Attorney to Help You With Your Car Accident

Find an expert car accident attorney with our network at LegalASAP. Our attorney network expands across the United States and can assist you in finding an auto attorney near you.

If you’re concerned with the costs of legal fees, some attorneys work with contingency fees—at no cost to you if you lose your case.

Fill out a free short consultation form, and we can check if you’re qualified for a claim. You may also ask questions at our hotline at 888-927-3080.