Auto liability coverage is responsible for covering damages to another vehicle or person that an at-fault driver causes during an accident. Damages are separated into bodily injury coverage, which covers medical bills and lost wages for the opposing, nonoffending driver, and property damage coverage, which covers damage to the vehicle itself. Auto liability coverage is limited to a specific amount, and the at-fault driver will be responsible for any additional compensation above the plan limit that they incur. Motorists who are concerned that their liability limits won't be enough can purchase umbrella coverage, which offers compensation for damages of $1 million or more. It is important to note that auto liability insurance does not cover any damages to the at-fault driver, either to their car or health.
What is Auto Liability Insurance and what does it cover?
Liability insurance is the most basic component of all auto insurance plans and is a legal requirement in almost every state in the country. It covers bodily injury and property damage caused by an at-fault driver in an accident but does not cover the damages sustained by the at-fault driver themself. Although plan specifics vary between states, most liability insurance plans will impose limits on the amount of coverage that the plan will pay for both bodily injury and property damage. For bodily injury damages, many plans will impose a limit of either $50,000 per person or $100,000 per incident, while property damage is set at a total payout of $50,000. Liability insurance can also be used to cover legal fees if the at-fault driver is being sued.
What does a typical Auto Liability Insurance Plan look like?
The cost for an auto liability insurance plan will vary based on a variety of factors including the state, driving record, and size of the plan. The current national annual average for this type of plan is $650 or about $54 a month. The cheapest annual rates based on the state of residence are North Dakota, South Dakota, Iowa, Wyoming, and Vermont with costs of $312.30, $337.11, $350.31, $356.08, and $374.06 respectively. The most expensive annual rates based on the state of residence are Louisiana, Florida, Michigan, New Jersey, and New York with costs of $1,023.91, $997.20, $979.47, $958.31, and $932.46 respectively.
How much does an Auto Liability Insurance Plan Cost?
Collision coverage helps to pay for damages sustained by a vehicle in an accident, whether or not the driver of the vehicle is considered at fault. It differs from liability insurance in that collision coverage focuses on paying for the owner's damages, whereas liability insurance focuses on paying for the opposing driver's damages when the owner is at fault. It also covers damages arising from hitting an object such as a fence, mailbox, sign, or telephone pole.
Do all States Require Auto Liability Insurance?
Currently, 48 out of 50 states in the country require some form of auto liability insurance for motorists, with only Virginia and New Hampshire not mandating this type of coverage. In New Hampshire, motorists are responsible to pay for all damages they cause in an at-fault accident, and face still penalties, fines, and loss of license if they are unable to do so. In Virginia, individuals have the option to pay a $500 uninsured fee to forgo car insurance. This fee must be paid whenever the vehicle's registration is renewed, and individuals are still responsible for covering at-fault damages that they may cause in an accident. The remaining 48 states that do require auto liability insurance require a minimum level of coverage, often around a 25/50/25 range, although individual states will vary.