Auto insurance liability coverage: What do I need to know for car insurance?

Auto insurance liability is a big concern for many drivers. If you’re involved in an accident, you could be found liable, in other words responsible for causing the accident, and will in turn have to compensate the other driver for any medical bills and repair costs. Thankfully, there are ways to protect yourself against liability claims. Understanding the basics of auto insurance liability can help you feel more confident when driving, and, most importantly, protect you in case of a car accident.

What is liability in car accidents?

The concept of being liable has to do with assigning blame. As a driver, if you are found liable for a car accident, it effectively means you are responsible for having caused the accident. This is also commonly referred to as being at-fault. When you are found to be at-fault depending upon the state you live in, you may be required to compensate the other involved party(ies) for any expenses stemming from the crash. These expenses can include car and property repair costs or medical bills.

Who determines who is at-fault?

Identifying exactly who and what caused a crash is key to assigning liability, but determining liability isn’t always an easy task. In some cases, it’s clear that a particular driver caused an accident or a driver readily admits to being at-fault. In other cases, drivers may not see eye-to-eye and accuse each other of causing the crash. Thankfully, liability can be shown in a variety ways by different types of evidence. If you are involved in an accident, the following can be used as forms of evidence to determine the at-fault driver:

• Police report: If you are in an accident where there is damage to another car or property or where someone has been physically injured, you should call the police immediately. Law enforcement will provide assistance and assess the scene where they can call for other resources like fire trucks and ambulances. They will also collect statements from all parties involved including any witnesses who saw the incident occur, all of which will be documented in a police report. While both driver and eyewitness statements are sometimes conflicting, having the police report can be instrumental in settling liability.

• Photos: Having pictures and videos of the entire crash scene, other vehicle, and license plates can assist in assigning liability. If it is safe to do so, take pictures while vehicles are in the original impact location, meaning before moving or repositioning the vehicle(s). These pictures can be important evidence if a car has lost control and left skid marks, the driver “hit and runs” by leaving the scene, or if the driver tries to change seats with a passenger. It is also imperative you exchange information with the other parties involved in the accident and can do so by taking pictures of the other driver's license, insurance, and registration documents.

• Video and dashcams: Dash cams, security camera footage, and video doorbells can capture and record detailed footage of car crashes that can be used to determine driver liability.

• Statements: Written witness and victim statements are another key piece of evidence in car accidents. As soon as you are able to, write down your recollection of events like what lane you were traveling in, how fast you were going, and any other details you can think of. It is also suggested that you obtain the names and details of any witnesses who may have seen the incident.

While being involved in an accident can be very unsettling, you can help to protect yourself in the long run by taking the proper steps of documenting the incident and collecting as much evidence as possible.

Liability and police reports

The official police report is a very valuable determining factor when assigning liability. When you are involved in a car accident, call 911 or your local emergency telephone number. It is best practice to report every accident to the police, even after the fact. Police reports can often be filed either in-person or online.

In-person police reports are typically necessary when it comes to major crashes, meaning they involved multiple vehicles or there was significant bodily injury or property damage. Officers or traffic investigation teams will perform crash investigations complete with photos, witness statements, diagrams, skidmark measurements, and debris field evidence markers. This evidence indicates where each of the involved vehicles was positioned at the time of the impact and, ultimately, which vehicle driver is at-fault.

Depending on where you live, online police reports can also be filed and are typically done so for minor crashes like fender benders with minimal property damage or ones without significant injuries. You may also have to file online in cases where an officer is not available due to inclement weather, understaffed shifts, or preoccupation with other higher priority 911 calls. To do this, see if you can submit the accident on the police department’s website.

Regardless of where you file the police report, either in-person or online, you will be given a case report number, or CR number, that will be used when filing a claim with your insurance company.

Filing a car insurance claim

You will most likely file a claim with your auto insurance company after you are involved in an accident that causes car repairs. Your insurance provider will use the available evidence like the police report to determine who is considered liable and not liable for the crash. The driver who is found at-fault, depending on the state they live in and how fault is treated, will have to pay to the other party, or parties, who incurred expenses and costs as a result of the accident.

The evidence helps car insurance providers approach cases where drivers are making competing insurance claims against each other. The claims adjuster considers the official police report and the statements by the parties and then assigns liability to either their policyholder or the other party.  This assessment of liability is used to determine the claim amount.

At-fault versus no-fault states

Not all states manage liability or insurance claims the same way. If a driver is involved in an accident and is found to be at-fault, different states can have different rules regarding who compensates the other. States can either be at “at-fault” or a “no-fault” state.

At-fault states place more responsibility on the offending driver. If a driver is deemed to be at-fault in an at-fault state, their insurance will be used to compensate the other party(ies)’ property and medical bills. This can be done via a driver making an insurance claim, one driver paying the other out-of-pocket, or by paying the compensation via an insurance policy. However, if an at-fault driver’s insurance policy coverage only covers a proportion of the costs incurred, the at-fault individual will still be expected to pay the rest out-of-pocket. It’s important to pay attention to the exact amount of coverage offered by each policy because of this as it may not fully protect all drivers.

The following are examples of at-fault states:

• Texas

• California

• Maryland

• Nevada

• Arizona

Liability still exists in a no-fault state, but payments related to medical injuries are handled differently. The offending driver’s property damage liability insurance covers vehicle repair costs but does not cover medical expenses. Each driver’s own personal injury insurance (not the at-fault driver’s) will be expected to compensate for their own respective medical costs. Therefore, it’s important for all drivers to have an adequate amount of personal injury protection in these no-fault states.

The following are examples of no-fault states:

• New York

• New Jersey

• Michigan

• Pennsylvania

• Massachusetts 

Liability car insurance coverage

When it comes to liability car insurance coverage, each insurance provider can operate differently within their own specific policies. However, there are two main components of liability insurance: property damage liability and bodily injury liability. Property damage liability will cover another driver’s property costs. Bodily injury liability helps pay for medical bills as well as sometimes compensates for lost wages of another driver if they are no longer able to work due to the accident.

While having liability insurance coverage is mandatory in most states, the exact amount of coverage can vary. This means that in states where only a small amount of coverage is necessary, at-fault drivers may still need to pay out-of-pocket compensation to the other driver if they don’t have enough insurance to cover the cost. Having a good amount of liability insurance, like 100/300 which is $100,000 per person and $300,000 per accident, protects drivers from unexpected costs and offers peace of mind even in the event that they are at-fault in a car accident.

Many liability insurance policies will also apply if you are found to be at-fault for an accident that involves hitting other people who are passengers within a vehicle or who are pedestrians. Like auto accidents, how insurance handles car versus pedestrian accidents can vary by state, so check with your insurance company for specific coverage details. Liability insurance can pay out bodily injury costs to each person involved in an accident you are liable for.

Mandatory car insurance

It is a legal requirement to have at least some level of basic liability coverage in almost all states, but there are some nuances. For example, it isn’t mandatory to have a minimum level of liability insurance in New Hampshire, or NH. However, if you choose not to have liability insurance in NH, you still need to have the means necessary to show financial responsibility and pay for a financial bond in the event that you are at-fault in an accident. You must be able to provide a financial coverage bond of at least $10,000 per person or $20,000 per accident. Unless you have the savings necessary to meet this bond requirement, it is highly recommended to have the minimal level of liability coverage.

Even a careful driver can make mistakes. Without the right insurance coverage, this can be a challenge. Whereas with liability insurance you could be protected from some of these costs. At Caribou, we can save you time and money when it comes to finding the right coverage that protects you. See if you can save on your car insurance policy.

Liability insurance FAQs

• What is liability in car accidents? Being liable for a car accident means you are responsible for causing the accident.

• What determines who is at-fault in a car accident? Several things can help to determine accident fault and which driver caused it. They include police reports, photos of the crash, video and/or dashcam footage, and witness statements.

• Which car insurance company pays for the accident? The insurance provider of the at-fault party normally pays for the accident claim.

• What is an at-fault state? At-fault states place more responsibility on the offending driver. If a driver is deemed to be at-fault in one of these states, their insurance will be used to compensate the other party's property and medical bills.

• Is there liability in no-fault states? Liability still exists in a no-fault state, but payments related to medical injuries are handled differently. The offending driver’s property damage liability insurance covers vehicle repair costs but does not cover medical expenses.

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