Liability car insurance: Stay covered

Liability insurance helps cover medical and legal fees if you're held legally responsible for someone else's injury, or damage to someone else's property.

Liability car insurance helps financially protect you if you're found at fault in an auto accident. It can help cover an injured person's medical bills or repairs to someone's vehicle. Drivers are legally required to carry liability insurance in most states.

Liability insurance comes in two forms: bodily injury liability coverage and property damage liability coverage. They break down like this:

Bodily injury liability coverage

Bodily injury liability coverage (sometimes abbreviated as “BI”) helps pay for an injured person's medical expenses if you're found at fault in an accident. This can include emergency room care, medical scans, follow-up visits, medical equipment (e.g., crutches, wheelchairs, neck braces), prescriptions and more.

It can also help cover other costs to related to the person’s injuries, such as lost wages, pain and suffering or legal fees if you're sued. This is why most states require that you have BI coverage on your car insurance policy to drive on the road.

Property damage liability coverage (sometimes abbreviated as "PD")

Property damage liability coverage (sometimes abbreviated as “PD”) helps pay for repairs if you’re at fault for damaging someone's vehicle or property. For example, if you rear-end another car, it can help pay for the other car’s repairs, so you're not stuck with the whole bill from their auto repair shop. As for property, this can include things like someone’s home, store, office, fence, tree, mailbox, etc. PD coverage is also required by law in most states.

The amount your insurer will pay for a covered liability insurance claim depends on the coverage limits you choose. Each state sets minimum coverage limits for bodily injury liability and property damage liability that drivers must purchase, but you may decide to buy additional coverages. Typically, you may see three liability coverage limits on your car insurance policy:

Property damage liability limit

This is the maximum amount your insurer would pay to repair damage you cause to another party's property. The maximum payout would not exceed the limit you've set.

Bodily injury liability limit per person

This is the maximum payout for each person who's injured in an accident that you cause.

Bodily injury liability limit per accident

This is the total amount your insurer will pay out for all medical expenses for a single accident you're at fault for. It's important to set this limit at an amount that makes you comfortable—it may be needed to help pay for the medical expenses of multiple people.

Many insurers package bodily injury and property damage limits together. For example, your policy may look something like this:

• 25/50/10 ($25,000 BI per person limit, $50,000 BI per accident limit, $10,000 property damage limit), or
• 100/300/50 ($100,000 BI per person limit, $300,000 BI per accident limit, $50,000 property damage limit)
• 250/500/100 ($250,000 BI per person limit, $500,000 BI per accident limit, $100,000 property damage limit)

Your coverage limits depend on the packages your insurer offers. In other words, you may not be able to choose individual limits for bodily injury or property damage coverage.

The amount you pay for liability insurance is based on a few factors, including how much coverage you purchase. The higher your coverage limit, the more you'll likely pay for liability insurance. Your insurer can tell you how much your coverage will cost if you adjust your limit.

Liability coverage in auto insurance typically doesn't pay to repair damage to your own car after an accident – collision coverage helps with that. It also doesn't pay to repair damage caused by other factors, such as hail – that's where comprehensive coverage comes in.

While liability coverage helps pay for the medical costs of someone you injure, it doesn't pay for your own injuries. That's why you may want to consider medical payments coverage or personal injury protection, depending on which state you live and drive in.

Reach out to your insurer if you have questions about liability car insurance or your state's coverage requirements.