Liability auto insurance protects you from that worst case scenario by providing a cushion between your assets and the amount you’re on the hook for. For this reason, choosing the right auto liability limits is the most important part of your car insurance quote comparison. NerdWallet typically recommends having at least as much liability coverage as your net worth.
Types of liability coverage
But liability coverage levels come in threes — you’ll probably see something like 50/100/50 up to 250/500/250 in typical policies. You can think of these limits like: individual injuries / total injuries / property damage. Insurers are a little more technical, calling them bodily injury liability, total bodily injury liability and physical damage liability.
They come in thousand-dollar increments, so when you choose 100/300/100 limits, you’re choosing:
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$100,000 for bodily injuries per person you injure in a crash.
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$300,000 total for all bodily injuries you cause in a crash.
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$100,000 for damage to any property you cause in a crash, including cars, buildings and objects like mailboxes and lampposts.
Auto insurance quote comparison tip: When choosing liability car insurance coverage, you’ll want to make sure the highest, middle number is equal to or greater than the value of your house and total savings combined.
Understand car insurance requirements in your state
In certain states, you may be required to have a car insurance policy that includes personal injury protection (PIP), medical payments coverage (medpay) or uninsured/underinsured motorist coverages — or two of the three. If you have medpay you don’t need PIP, and vice versa.
Any car insurance comparison tool you look at should have your state’s minimum car insurance requirements pre-loaded into its options. States requiring PIP or medpay are generally referred to as “no-fault” states, meaning that when injuries occur, each driver in a crash makes a claim with their own insurance company to pay for them. Beyond the PIP or medpay limit, the at-fault driver’s liability insurance kicks in to cover the rest.
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