Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Benjamin Carr was a licensed insurance agent in Georgia and has experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. Benji is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent

UPDATED: Feb 10, 2021

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Advertiser Disclosure: We strive to help veterans make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with one auto insurance company and cannot guarantee quotes from any single company. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

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To Sum It Up

  • Liability insurance is required in all states except New Hampshire.
  • Your liability car insurance policy is made up of several other policies.
  • When you buy liability auto insurance, you secure the cheapest rates the auto insurance company can give you.
  • Uninsured/underinsured motorist auto insurance is often included in liability auto insurance.

Liability auto insurance is one of the essential coverages if you’re going to drive in the United States. However, each state carries different standards for liability car insurance.

Specific factors determine your liability auto insurance rates, but you can secure cheap liability auto insurance through various methods. Continue reading this guide to learn the basics of liability car insurance and why you need it.

Also, we’ll take you through the average liability auto insurance cost by state.

Enter your ZIP code in the free comparison tool above to compare companies in your area with affordable liability auto insurance quotes.

What is liability auto insurance?

Liability car insurance provides bodily injury and property damage coverage to another driver when you’re at fault in a vehicle accident. Anyone who drives in the United States will require liability insurance.

According to the New Hampshire Department of Motor Vehicles, there aren’t any auto insurance requirements in the state. However, it doesn’t mean liability auto insurance isn’t in your best interest.

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What does liability auto insurance cover?

Your liability car insurance coverage will depend on the state where you live and how much you want on your coverage limits. Let’s look at the common coverages that can come with your liability policy.

Bodily Injury Liability

Bodily injury (BI) covers the cost of injuries of the other party (driver and passengers in another car). The purpose of BI is to provide compensation for injury to someone else when you’re at fault.

Property Damage Liability

Property damage (PD) works the same as BI, but PD covers the other party’s property (their vehicle). Your auto insurance company will verify if the other party’s car is repairable or a total loss.

It’s very important to carry enough on your coverage limits if the other party has a vehicle that’s worth more than $25,000.

Uninsured/Underinsured Motorist Coverage

The uninsured/underinsured motorist coverage options help you when another party doesn’t have enough on their coverage limit to pay for injuries or damages to your car.

Uninsured motorist (UM) coverage will compensate you when you’re in an accident with an at-fault driver who doesn’t have auto insurance. Your uninsured motorist coverage can even pay for injuries and damages from a hit-and-run driver.

Underinsured motorist (UIM) coverage pays for any leftover cost when an at-fault driver doesn’t have enough money on their coverage limits to pay for injuries and damages.

Personal Injury Protection

Some states will carry personal injury protection (PIP) on the minimum car insurance requirements. PIP is a no-fault coverage that provides help with lost wages, childcare expenses, and other personal deterrents due to an accident.

Personal Umbrella Policy

If you have the highest coverage limits and still don’t have enough to pay for injuries or damages to another party, you may need to get a personal umbrella policy (PUP). PUP can save you from a massive lawsuit and ensure the other party can recover.

Other Liability Insurance Policies

There are other general liability insurance policies you should know about. Let’s review them in the smaller sections below.

Business Liability Insurance

Business liability insurance (also known as general liability insurance and professional liability insurance) is a commercial liability policy that pays for errors and other issues that the company is liable for, such as an at-fault driver or faulty repairs.

Product Liability Insurance

A business’s product liability insurance covers any product that causes injury or damage. Product liability can prevent a company from going through unnecessary court costs and saves a company from negative press.

What are the minimum liability auto insurance requirements?

If you want the cheapest car insurance you can find, aim for auto insurance’s bare minimum requirements. Liability car insurance quotes are usually less expensive when you ask for liability-only insurance with the lowest coverage level.

But what are the minimum car insurance requirements? Let’s review the minimum requirements for each state. Enter your state in the search box in the top-right corner.

Military Garaging Discount Availability from Major Auto Insurance Companies
ProviderMilitary Garaging
21st Century
AAA
Allstate
American Family
Ameriprise
Amica
Country Financial
Esurance
Farmers
Geico
Liberty Mutual
MetLife
Nationwide
Progressive
Safe Auto
Safeco
State Farm
The General
The Hanover
The Hartford
Travelers
USAA✓- 15%
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The minimum requirements for each state are very similar. But what does each BI/PD limit mean?

The numbers within the coverage limit stand for bodily injury and property damage. For example, a state with BI/PD limits of 25/50/25 means $25,000 for bodily injury of one person per accident, $50,000 for bodily injury of multiple people per accident, and $25,000 for property damage per accident.

Some states carry MedPay as a requirement, too. MedPay (medical payments) is an auto insurance coverage that gives you more money on medical bills, such as x-rays and doctor’s visits.

How much is liability auto insurance?

Liability car insurance is determined by a few factors, which include:

  • Age
  • Gender
  • Location (State or City)
  • Vehicle
  • Coverage Level
  • Commute Mileage
  • Credit Score
  • Driving Record
  • Auto Insurance Company

An auto insurance company will ask for personal information to get an accurate quote to narrow down your liability auto insurance rates effectively.

However, the National Association of Insurance Commissioners (NAIC) records the average liability auto insurance cost per year. Let’s examine the average liability insurance rates by state.

Allstate vs.Progressive Average Monthly Rates Based on Age Group
Age GroupAllstate Average Monthly RatesProgressive Average Mothly Rates
Teenagers$537$687
20-29$220$191
30-39$220$137
40-49$159$137
50-59$157$129
60-69$147$117
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We sorted the data by cheapest to most expensive state and found North and South Dakota to be the most affordable states for liability auto insurance. Meanwhile, the most expensive states are Florida and New Jersey.

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Liability Auto Insurance: Advantages and Disadvantages

Although liability auto insurance is required in most states, it has a few pros and cons. This section will explore the advantages and disadvantages of liability car insurance.

Advantages

Liability takes care of the other driver when you’re at fault in a car accident. All you have to do is give the other party your insurance information, and your auto insurance company will take care of the rest. With enough coverage limits, the other party can make a full recovery.

Disadvantages

The downside to liability auto insurance is that it doesn’t cover property damage for you. In some states, you can get bodily injury compensation through PIP and MedPay. As far as your vehicle is concerned, you will not receive coverage.

Liability Auto Insurance: The Bottom Line

Liability is affordable auto insurance for military veterans, depending on the company. Based on the NAIC data, the average liability auto insurance rate is $46 per month. However, your car insurance rates could increase if you increase your coverage level.

To secure cheap liability auto insurance, compare multiple companies by entering your ZIP code in the free online quote tool below.