We’ve all seen it. How getting auto liability insurance keeps you legal, with plenty of companies offering to do so for less. It’s the bare minimum coverage, and yet, it’s one of the most important parts of your car insurance that goes well beyond keeping yourself out of legal trouble. Cheap is important, but staying covered is the goal. Our guide helps you understand how to find the right protection and save when doing so.

What Is Auto Liability Insurance?

If you’re in an accident and cause damage to someone’s property or bodily injury, auto liability insurance steps in and helps you restore their loss.

This is why so many states require this protection as a part of your car insurance by law, so that drivers can maintain financial responsibility while out on the road.

Look, accidents happen, and with rising medical and repair costs, having liability motor insurance is a safety net everyone can appreciate.

Otherwise, not only are you facing potential legal issues, but you can also face…well, more expensive legal issues.

Drivers who fail to maintain this coverage can be held liable for the damages they’ve caused and brought to court by the affected parties, costing thousands in legal fees on top of what they pay to restore the losses involved.

What Does Liability Auto Insurance Cover?

Your liability auto insurance covers you with two different coverages that work together for a more complete form of protection:

• Bodily Injury Liability: Helps you pay for medical bills if someone is injured in an accident you cause.
• Property Damage Liability: This part pays for the affected party’s damage to property. While this includes their vehicle, it may also cover personal belongings.

Free-Dom Tip: If you want protection for your own medical bills or vehicle, you’re going to need additional coverage. Liability coverage is protection for the other parties, not you.

Why Is Liability Motor Insurance Required?

Most U.S. states mandate auto insurance liability coverage for a good reason. By doing so, it ensures everyone on the road has a minimum level of financial protection.

Car accidents can be expensive, and this type of policy makes sure victims aren’t left covering costs themselves.

Driving without liability insurance can lead to fines, license suspension, and higher future premiums. In some states, it may even be illegal to register a car without showing proof of liability coverage.

How Much Auto Liability Insurance Do I Need?

The required amount of auto liability insurance coverage varies by state, but the minimum is often not enough to fully protect you.

If the damages from an accident exceed your car liability coverage limits, you’re personally responsible for the rest.

While not everyone has the budget to go beyond the minimum, it’s always a good idea to consider 100/300/100 coverage when shopping around:

• $100,000 per person for bodily injury
• $300,000 per accident for total bodily injury
• $100,000 for property damage

Keep in mind that, on average, medical bills alone can run $15,000 or more per accident.

By comparing a variety of carriers, whether you’re sticking with the bare minimum or enrolling in a bit more, you can find the right level of protection while saving money in the process.

Free-Dom Tip: You may also want to consider umbrella insurance for added protection if you have significant assets to protect. This can help in larger accidents that extend past the typical limits of liability insurance for automobiles.

Liability Coverage vs. Full Coverage Explained

There’s often confusion between liability and full coverage, and sometimes, it’s simply better to see the difference side by side. Here’s how both compare:

Coverage Type	What It Covers	Who It Protects
Liability	Other people’s injuries and property	The people you hit
Full Coverage (Liability + Collision + Comprehensive)	Your car, theft, weather damage, vandalism, and more	You and your vehicle

Remember, if you’re financing or leasing a vehicle, your lender will probably require full coverage. But even if you own your car outright, full coverage might make sense depending on the value of your vehicle and your risk tolerance.

How Auto Liability Insurance Fits Into Your Policy

Auto liability insurance isn’t optional, so understanding its role may feel like a moot point, as it’s a core part of every policy.

When you request a quote or compare plans, you’ll always see liability limits listed first.

However, it’s this cornerstone that keeps you covered when things don’t go your way and you’re responsible for the damage.

Understanding your liability limits and how they interact with the rest of your policy will go a long way in helping you make smart decisions when shopping for auto insurance.

Saving money is important, but always protect yourself by enrolling in the right amount of automobile insurance liability coverage when comparing your options.

Choosing the Right Liability Auto Insurance Coverage

Picking the right liability limits depends on your situation. Every driver has their own risks, but here’s what to consider when comparing:

• Your state’s legal minimums
• The value of your assets
• Your driving habits and risk tolerance
• Your budget

It might be tempting to go with the cheapest policy, but cutting corners on liability can backfire. Always compare auto liability insurance options. Just make sure you select the right coverage for your long-term financial protection after a crash.

Sources:

Brown & Crouppen. Accessed August 2025.