Updated March 2026
What Is Liability Insurance Insurance?
Liability insurance has two parts: bodily injury liability and property damage liability. Bodily injury liability pays for medical bills, lost wages, and legal costs if you injure someone in an accident you caused. Property damage liability covers repairs to another person's car, fence, mailbox, or other property you damage. Both parts include legal defense costs if you're sued. Your policy will have dollar limits for each type, typically written as three numbers like 25/50/25 — that means $25,000 per person injured, $50,000 total per accident for injuries, and $25,000 for property damage.
How Much Does Liability Insurance Insurance Cost?
- Your coverage limits — choosing 100/300/100 instead of state minimums can double your premium, but minimums often leave you financially exposed.
- Your age and driving history — drivers under 25 typically pay 50% to 100% more because insurers view them as higher risk based on accident statistics.
- Where you live — urban areas with more traffic and higher accident rates cost more, and some states like Michigan or Louisiana have premiums double the national average.
- Your claims history — even one at-fault accident can raise your liability premium by 20% to 40% for three to five years.
- Your credit score in most states — insurers use credit-based insurance scores, and poor credit can increase rates by 50% or more even for the same coverage.
- The type of car you drive — higher-value or high-performance vehicles can increase liability costs because damage you cause may be more expensive.
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