What Does Liability Auto Insurance Cover?
Liability Insurance is designed to cover:
- Medical costs for victims who are injured in a collision that you caused
- Auto repair expenses for people whose vehicles are damaged in a collision that you caused
- Medical costs for victims who are injured when your vehicle strikes a pedestrian or a bicyclist
- Replacement or repair expenses for owners of property that you damage if your vehicle strikes an object
Liability Insurance Limits
Liability Insurance does not operate like a "blank check" for damage or medical costs for which you are responsible. There are coverage limits that fall into three categories:
- the amount of money that will cover bodily injury costs per person
- the amount of money that will cover bodily injury costs per accident
- the amount of money that will cover property damage costs per accident
For example, a Liability policy might cover up to $25,000 in bodily injury costs per person, up to $50,000 in bodily injury costs per accident (if more than one person is injured), and up to $15,000 in property damage (to repair the vehicle and/or any object or structure that is damaged).
In Auto Insurance parlance, these policy limits are expressed as $25,000/$50,000/$15,000 (or 25/50/15 in shorthand).
State Minimum Liability Insurance Limits
States with mandatory Auto Insurance laws have minimum limits of Liability Insurance coverage which all drivers must purchase. Since every state is different, you can check our Auto Insurance Guidelines by State to find out what the minimum limits are for your state.
Whatever limits you choose to have on your policy, if the costs for a given incident exceed those limits, you will then be required to pay out of your own pocket. That's why it's vital to purchase a policy with coverage limits you feel won't be exceeded if you happen to cause an accident.
Liability Insurance Doesn't Cover Everything
Most importantly, you should be aware that Liability Auto Insurance does not pay for every possible cost that can be incurred as a vehicle owner. Some of the expenses not covered by Liability Insurance include:
- Damage to your own vehicle as the result of an accident that you cause
- Damage to any possessions inside your vehicle as the result of an accident that you cause
- Medical bills for any injuries that you sustain as the result of an accident you cause
- Damage caused by vandalism
- Damage caused by fire
- Damage caused by hail, flooding, or a similar weather event
- Replacement of your vehicle if it is stolen
To help cover some of the potential costs above, consider adding coverages like Collision, Comprehensive, Medical Payments, Uninsured/Underinsured Motorist coverage and more for a more well-rounded Auto Insurance policy.