Liability Car Insurance Coverage

Liability insurance helps pay for the damages to another person’s car when you cause an accident.

February 24, 2025

The cost of an accident can add up quickly. If you are at fault, you could be responsible for repairs to the other vehicle, as well as medical bills if anyone was hurt. And if your vehicle bounced over a curb and, say, damaged someone’s fence, you’d have to pay for that, too. Can’t cover those costs? Your wages might be garnished until all the bills are settled. When you’re at fault in an accident, liability coverage on your car insurance policy can help save the day.

What is liability car insurance?

Most states require drivers to carry liability insurance. If you cause an accident, liability coverage pays to help fix the damages. That includes injuries to others, plus damage to other people’s property. And if you get sued, your coverage can pay to repair or replace the other driver’s vehicle; reimburse other injured drivers, passengers, or pedestrians for medical expenses and lost wages; and pay for others’ damaged property (up to your policy limit) so you don’t have to pay those expenses out of your own pocket.

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What does liability insurance cover?

Liability insurance includes bodily injury coverage, which pays medical bills and lost wages for people who were hurt, whether they were passengers, drivers, or pedestrians involved in the accident. It may also cover related expenses such as rehabilitation costs or legal claims tied to injuries.

It also includes property damage coverage, which pays to repair or replace other people’s vehicles if they are wrecked. Property damage coverage can also pay for the repair or replacement of other people’s property that was damaged in an accident, including fences, lampposts, and mailboxes.

In addition, liability insurance typically includes legal defense coverage, which helps pay for attorney fees, court costs, and settlements if you are sued after an accident.

While it can vary by carrier, a liability policy is usually expressed as a series of three numbers. A 50/100/25 policy, for instance, pays up to:

$50,000 per person for bodily injury
$100,000 per accident for bodily injury
$25,000 per accident for property damage

These limits represent the maximum amount your insurer will pay for covered claims. Any costs beyond those limits would generally be your responsibility.

What isn’t covered by liability insurance?

Liability insurance doesn’t cover:

Repairs to your vehicle
Your medical bills
Damage to your own property
Intentional damage you cause

Liability insurance is designed to pay for other people’s injuries and property damage, not your own expenses.

However, other types of auto insurance can help fill these gaps:

Collision insurance covers damage to your vehicle after an accident
Medical payments coverage (MedPay) helps pay your medical bills regardless of fault

If you use your vehicle for business purposes, liability insurance also typically won’t cover employee injuries, which may require a separate workers’ compensation policy.

What is the minimum liability insurance coverage required?

The minimum auto liability coverage requirement varies by state. Be sure to check your state’s current laws and requirements.

How much liability coverage do I need?

To figure out how much liability coverage you need, think about the total value of your assets, which you’ll want to protect. If you cause an accident and the total bill exceeds your coverage limits, you’ll have to pay the difference out of your own pocket. An insurance agent can help you find the right policy and car insurance coverage for you.

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Content on this page is for informational purposes only and should not be considered as official recommendations or advice from AAA Northern California, Nevada & Utah.