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What Can Happen If I Don’t Have Enough Auto Liability Coverage?

By Allison Hess

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Are you holding enough auto liability coverage on your auto insurance policy? If not, you could be financially on the hook for any excess costs if you cause a car accident. You don’t want to be left with a huge bill to pay.

What is the importance of having enough auto liability coverage?

What is liability coverage?

“Liability” coverage protects you in the case that you are found liable for another person’s expenses. So, you get into a car accident. You are found at-fault or at least partially at-fault. This means you are responsible for the other driver’s damages. Your liability coverage would step in to pay for the expenses of the other party or parties.

There are two types of auto liability coverage: bodily injury liability and property damage liability.

Bodily injury liability covers any expenses related to the injury of the driver or passengers. This would cover medical bills, pain and suffering, rehab costs, lost wages, and other associated costs. This can be one of the most expensive costs if you are found at-fault for an accident where another party is injured.

Property damage liability covers damages related to the other person’s property. This could include a car, mailbox, or other physical structure.

What happens if I don’t have enough liability coverage?

If you are found liable for another party’s damages, you could be facing serious costs.

Bodily injury is especially expensive. An ambulance ride alone averages around $1,000 and a simple ER checkup can be upwards of $3,000. Even if the other party isn’t actually hurt, their bills can be hefty right off the bat. If they are seriously injured or killed, you could be looking at hundreds of thousands—if not millions— of dollars.

With regard to property damage, a totaled car is a minimum of $25,000 worth of damage. Even small dents can cost several thousands of dollars in repairs.

If you didn’t have liability insurance at all, you’d be on the hook for all of these costs. That’s why most states require drivers to carry a minimum amount of liability coverage. Otherwise, your life could be completely turned upside down in one instant.

But even if you have both forms of liability insurance, it still might not be enough. Let’s say for example your property damage liability limit is $20,000. But you are found at-fault for $30,000 worth of damage. That means you have $10,000 over your policy limit.

Generally, you are responsible for paying the excess cost over your liability coverage.

If you can’t pay, you could end up in serious trouble. The other party could come after you personally. You might have to take out loans or extra mortgages, which could put you in debt. You might have to sell off your assets—or a collector could take your assets from you forcibly. The Secretary of State might even suspend your license until you’re able to pay.

That’s why you want to make sure your liability limits are high enough to protect you in worst-case scenarios. You want your insurance company paying for costs so you don’t end up with a chunk of change taken from your pocket.

How can you protect yourself?

1. Raise your liability limits.

The best thing you can do to protect yourself is to raise your liability limits. As a minimum, we typically recommend limits of $100,000 for property damage and $250,000/$500,000 for bodily injury liability.

Call us and talk to an insurance agent to discuss your necessary liability limits.

2. Get a lawyer.

Keep in mind that liability usually means you are found at-fault in a court of law. The other driver will usually serve you with a lawsuit and you and your insurer will fight it. The court will then decide how much you owe to the other party. In some cases, you won’t go through a lawsuit if you admit responsibility or don’t want to fight in court.

Nevertheless, it’s important to get yourself a strong lawyer to fight against these claims. Even if they can’t completely get rid of the case, they may be able to pull down the costs to meet your liability limits.

For example, your property damage insurance limit is $20,000. The other party is suing you for $30,000. Your lawyer might be able to collect some documents and body shop quotes to convince the judge to give you a $20,000 suit instead. Arguing down the cost is in the best interest of you and your insurer, so sometimes your insurance company will help cover a set cost of legal fees.

3. Lower your costs.

A lot of people don’t have enough liability insurance because they don’t want to pay the monthly premiums. That can feel like a fair concern because liability rates are the highest part of your auto insurance. But that’s also because it’s the most important coverage.

So if you need to lower your auto insurance costs, take the “hit” on other parts of your insurance. For example, you might want to raise your deductible for collision and comprehensive insurance. This means you’d pay more out of pocket if you damaged your own car, but you wouldn’t be stuck on the hook for someone else’s expenses (which is usually more serious and legally liable).

You might also want to look into insurance discounts, like safety discounts or bundling. These can help lower your costs by proving that you’re a safe, reliable, low-risk driver.


Bodily injury liability and property damage liability will help protect you in the case you are found at-fault for another person’s expenses in an accident. Don’t be caught without liability coverage and end up having to pay exorbitant costs out of pocket. Liability isn't expensive and not worth saving a few dollars on your car insurance policy. Call us at The Huttenlocher Group and let's make sure you're covered.


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The Huttenlocher Group

1007 W Huron St, Waterford , MI  48328

(248) 681-2100

1007 W Huron St, Waterford Twp, MI 48328

(248) 681-2100

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