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What Does Liability Car Insurance Typically Cover?

Published: February 2013

Liability car insurance covers damages to another person resulting from an accident you cause. One of the most basic types of auto insurance coverage, liability is also one of the few coverage options that's mandatory in every state—though minimum limits of coverage vary, depending on where you live.

But what is liability coverage? Read on for some useful information.

Video Transcript

Explainer Video (2:13): What Is Liability Coverage?

Announcer (voiceover): Liability coverage in your auto insurance policy—no matter which state you live in, it's required at some level. But, do you understand what liability coverage is, and what it protects?

Announcer (voiceover): Liability is usually built from two components: bodily injury and property damage.

Announcer (voiceover): Bodily injury liability coverage helps protect you if you're responsible for an accident that hurts another person.

Announcer (voiceover): Bodily injury liability can help you pay for the other person's medical bills, compensation for loss of income and emergency aid at an accident scene, as well as your legal bills if that person sues you.

Announcer (voiceover): Two limits exist within Bodily Injury coverage: per person and per accident. For example, within a policy you might see a $50,000 maximum payment per person, and a $100,000 maximum payment per accident.

Announcer (voiceover): Then, there's property damage liability coverage, for damage you cause to someone else's property (but not your own). If you hit someone else's car, for instance. Or run into their house or storefront.

Announcer (voiceover): Property damage liability coverage can help pay for structural damage, repair or replacement costs for stationary objects like fences, even vehicle repair or replacement. It can even help keep your assets safe if a covered accident results in a lawsuit.

Announcer (voiceover): On your policy, the per person, per accident and property damage limits are often written like this:

(A hand draws a picture of an insurance policy that says "Limits: Per person, per accident and property damage. 100/300/100")

Announcer (voiceover): An accident can lead to financial responsibilities—so it's a good idea to make sure you carry enough liability coverage to protect yourself.

Announcer (voiceover): So now for a quick overview: Liability coverage = bodily injury + property damage coverage.

Announcer (voiceover): Bodily injury liability coverage can help pay for medical bills and other related expenses if someone else is hurt in an accident you're responsible for.

Announcer (voiceover): And, property damage coverage can help protect your assets and help pay for structural damage, stationary objects and another person's vehicle.

Announcer (voiceover): Have questions? Contact your Allstate agent today.

(Hand writes:


Two Types of Liability Coverage

If you're found to be at fault in an accident, liability coverage will help you pay for damage to another person's property (this is called property damage liability) or for costs associated with their injuries (the coverage known as bodily injury liability) that you are responsible for.

Make sure you have the liability coverage you need. Talk to a local agent.

Get a quote > Find an agent >

Featured Resource

What Does Auto Liability Cover?

Learn about the two types of auto liability coverage and how they may help after an accident.
Click to view infographic.

What Does Auto Liability Cover?

Learn about the two types of auto liability coverage and how they may help after an accident.
Click to view infographic.

Coverage Limits

When you're reviewing the liability coverage options of your auto insurance policy, you will notice different limits:

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

Bodily injury liability limit per person injured. This establishes a maximum payout for each individual who is injured in an accident that you cause, up to your policy limit.

Bodily injury liability limit per accident. This sets a cap on the total amount that your insurance provider will pay out for all damages associated with a single accident you cause. It's important to set this limit high enough so that it will be enough to pay the medical expenses incurred by multiple people.

Consider the following: You are at fault for a crash that injured three people in another car; your bodily injury liability limit per person is $50,000 and your bodily injury limit per accident is $100,000. If Person 1's medical bills total $40,000, Person 2's cost $30,000 and Person 3's cost $25,000, you're likely covered, as each person's bills were under $50,000 (your bodily injury limit per person), and the total cost of injuries is $95,000, which is lower than your $100,000 bodily injury limit for a single accident.

What's Typically Not Covered by Liability Insurance?

Liability coverage typically doesn't pay for damage to your own car or costs associated with your own injuries from an accident you cause. There are other types of coverage to consider. For example, collision coverage can help you pay for damage to your own vehicle.

Liability coverage also does not extend to your injury costs. If you want this type of coverage, you may want to consider medical payments coverage or personal injury protection.

How Much Liability Coverage Do You Need?

When you purchase an auto insurance policy with liability coverage, you should pay attention to the limits. You need to meet the state's minimum required limits, of course, but you may want to purchase a policy with higher limits to make sure you're better protected. The reason is that, if the damage you accidentally cause exceeds the limits of your coverage, you may be held financially responsible for the difference.

As you consider what kind of auto insurance policy to purchase, talk to an insurance agent about your options and the liability coverage limits that make sense for you.

Coverage subject to terms, conditions, and availability. Policy issuance is subject to qualifications. Allstate Insurance Company, Allstate Indemnity Company, Allstate Fire and Casualty Insurance Company, Allstate Property and Casualty Insurance Company, Northbrook, IL. © 2017 Allstate Insurance Company, Northbrook, IL.
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