Uninsured motorist insurance protects you if you have an accident with an at-fault driver who doesn't have liability insurance. Underinsured motorist coverage intervenes when you have an accident with an at-fault driver whose limits of liability are too low to cover the medical expenses of any injured person. Auto liability insurance is a type of insurance that covers the cost of injuries and damage to the other driver's property if you are at fault for an accident. Auto liability insurance consists of both bodily injury and property damage liability insurance.
The term “liability only” auto insurance is used to distinguish policies with basic coverage from those with collision insurance and comprehensive coverage. For tips on whether liability insurance alone is enough for your situation, check out WalletHub's guide to how much car insurance you can take out. Liability insurance is car insurance that covers damage or injury to a third party's property in the event of an accident. The exact cost of an auto liability insurance policy varies depending on several factors, including the state, the insurance company, the driver's history, and the amount of coverage purchased.
Auto liability insurance comes into play when the policyholder is found to be at fault for a car accident. Bodily injury liability insurance covers the other driver's medical expenses, while property damage liability insurance covers your vehicle and other items damaged in the accident, such as your house or a fence. And if your car is leased or financed, your lender will likely require you to take out collision and comprehensive insurance. You should have liability insurance only if the annual cost of full coverage exceeds 10% of the value of your car.
Liability insurance figures mean that an insurer will only pay liability claims for bodily injury or property damage up to a certain amount in dollars. Liability limits in auto insurance are the maximum amount your insurance company will pay for injuries and property damage in accidents you cause. Auto liability insurance covers medical expenses and property damage expenses incurred by other people as a result of an accident that you were held responsible for. The difference between comprehensive insurance and liability insurance is that comprehensive insurance covers your car when it is damaged by something other than a collision, while liability coverage pays for property damage and other people's injuries when you cause an accident.
All auto liability insurance policies include limits that are expressed with these numbers, and the order and notation are always the same. On average, auto liability insurance costs 51% less per year than full-coverage insurance, which generally includes liability along with collision coverage and comprehensive coverage. Liability insurance is the least expensive car insurance because it provides minimal coverage.
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