Auto Liability Insurance: What Is It and Why Do You Need It?

Auto liability insurance is a type of car insurance required by law in almost every US state. If you get into an accident and you’re found to be at fault, liability insurance will help pay for the damage experienced by the other party, including damage to their car or other property as well as medical expenses.

Let’s break down exactly what it means to have auto liability insurance and why it is legally required.

What is covered by auto liability insurance?

Auto liability insurance covers expenses from both bodily injury and property damage. This means that if you cause someone else to get hurt in an accident, auto liability insurance will help pay their medical bills, including the costs of prescriptions. It could also help with legal costs if the other party sues you, the costs of their lost wages, and the costs of pain and suffering they experience. In addition, if you damage someone’s vehicle or other property in an accident and you’re found to be at fault, auto liability insurance will help cover those costs, too.

What doesn’t it cover? Costs of damage to your vehicle will only be covered by collision or comprehensive insurance. While those two types of car insurance are not legally required for drivers, including in Massachusetts, they are recommended, as otherwise, you may end up paying for damage you cause to your vehicle out-of-pocket.

Liability insurance also doesn’t cover your medical bills if you’re found at fault for incurring an injury. To cover these expenses, you need personal injury protection, which is required by law in Massachusetts and other states.

Do I need auto liability insurance?

Yes, most likely, you do need to purchase a policy with auto liability insurance. It is mandatory for all drivers in 49 states and the District of Columbia. The only state where you don’t need to have auto liability insurance is New Hampshire—but there, you do need to show that you have sufficient funds to cover the costs of an at-fault accident.

There are different minimum liability limits for auto liability insurance mandated in each state. For example, Massachusetts has a 20/40/5 minimum liability limit. What does this mean? The first number, 20, refers to the bodily injury liability limit for one person injured in an accident—in this case, $20,000. The second number refers to the bodily injury liability limit for everyone injured in an accident—here, a total of $40,000. The third number refers to the property damage liability limit—$5,000.

Remember, that’s just the legally required minimum. You can purchase a policy that covers higher amounts of damage, though it may have a more costly premium.

How much does auto liability insurance cost?

Drivers generally pay far less for their total car insurance policy than the numbers listed in minimum liability limits. This is why it’s so important to have liability insurance in the first place—it’s better to pay only a few thousand (or even less than a thousand) per year to ensure that you won’t have to pay tens of thousands out of pocket for someone else’s medical bills.

In total, Massachusetts drivers pay an average of $1,737 for car insurance, policies which generally include auto liability insurance by default, since it’s required by law.

How is liability insurance different from “full coverage” car insurance?

When you hear the term “full coverage” when talking about car insurance, it generally refers to a package that groups together liability, comprehensive, and collision coverages. Because liability insurance only covers the damage inflicted on other parties—not your own property damage or medical expenses—many people also choose to purchase comprehensive and collision coverage, which cover the damages to your own vehicle.

To cover your own medical expenses if you are in an accident, you also need personal injury protection, which is required in many states, including Massachusetts. You are also required by law in Massachusetts to have coverage for bodily injury caused by an uninsured vehicle.

Learn more about auto insurance and what you need by speaking to an agent at C&S Insurance—we’re here to answer all your insurance questions.