What is the meaning of liability coverage in car insurance?

Basically, liability coverage is a part of your car insurance policy, and helps pay for the other driver's expenses if you cause a car accident . It does not, however, cover your own. It's important to note there are two types of liability coverage: bodily injury and property damage.

What does liability insurance provide coverage from?

Liability insurance provides protection against claims resulting from injuries and damage to people and/or property . Liability insurance covers legal costs and payouts for which the insured party would be found liable. Provisions not covered include Intentional damage, contractual liabilities, and criminal prosecution.

What is the limit of liability coverage?

Personal liability limits You may be able to choose your personal liability coverage limit; often the three choices are $100,000, $300,000, or $500,000 . Your limit typically applies to covered damages that you're legally liable for.

What is the difference between full coverage and collision?

Comprehensive covers damage to your vehicle from unexpected non-collision incidents like theft, animal damage, falling trees, and weather damage. Collision covers damage to your vehicle that's the result of a collision with another vehicle or object.

What does liability insurance protect you against?

Liability insurance coverage protects you financially if you're responsible for someone else's injuries or property damage . Liability coverage comes standard with most vehicle and property insurance policies, including auto and homeowners insurance.

What type of liability coverage do you need?

Most states generally require bodily injury liability and property damage liability coverage , roughly half require some type of uninsured/underinsured motorist coverage, and more than a dozen require personal injury protection, for example.

Does liability insurance cover products?

Product liability insurance helps protect your business from claims that a product you made or sold caused bodily injury or property damage to someone else's belongings. An insurance company may offer this coverage as a standalone policy, but we include it as part of your general liability insurance .

What is the meaning of full coverage car insurance?

Full coverage auto insurance includes a combination of liability, medical, collision, and comprehensive coverages to protect you in most scenarios that could occur with your vehicle . If you intend to or already have purchased full coverage, it's important to read your insurance contract.

What is an example of a coverage limit?

If you have an auto insurance split limit of $250,000/$500,000/$250,000, this translates to $250,000 per person for bodily injury, $500,000 per occurrence for bodily injury, and $250,000 per occurrence for property damage .

What provides coverage for liability and damage to property under certain conditions?

Property insurance refers to a series of policies that offer property protection, including structural damage, theft of personal belongings, and liability coverage. Property insurance can include homeowners insurance, renters insurance, flood insurance, and earthquake insurance.

How can insurance protect you from financial loss?

An insurer will help you cover the costs of unexpected and routine medical bills or hospitalization, accident damage to your car or injury of others, and home damage or theft of your belongings .

What is Liability Car Insurance? ~ Get Coverage (2024)

Liability Car Insurance

Liability coverage in your car insurance policy pays for property damage and/or injuries to another person caused by an accident in which you're at fault. This type of auto coverage is required by most states to legally drive your vehicle.

Auto liability coverage typically refers to two types of coverages: property damage and bodily injury.

Property damage coverage pays for damage to another person's property
Bodily injury coverage provides payment for others injured in an accident

We can help you get the coverage you need.

What does auto liability insurance include?

Liability coverage includes property damage and bodily injury coverages.

Property damage coverage insures against damage to another person's property caused by your vehicle. This includes:

Repairs to the other driver's vehicle
A rental vehicle while the other person's car is being repaired
Damage to buildings, fences, or other structures
Damage to personal property, such as electronics or belongings inside a vehicle
Legal fees if you're sued for property damage
Other miscellaneous costs related to the property damage incident

Bodily injury covers injuries sustained by another person because of the accident. This can include:

Medical bills
Prescriptions
Lost wages
Pain and suffering
Legal fees if you're sued for injuries you caused

States may have different requirements on who can file a bodily injury claim against you.

What does liability coverage not cover for an auto accident?

Liability coverage helps cover damages you're responsible for to another party because of an accident. That means it doesn't cover damages to your property or your injuries. Your damages and injuries are protected under other coverages such as:

How much does liability coverage cost?

The cost of liability insurance coverage as part of your auto insurance policy depends on many factors. This can include things like how much coverage you select. For example, higher coverage limits may cost more.

Tip: There are a variety of different liability coverage limits, usually expressed as three numbers, such as 25/50/10. These numbers indicate the coverage for bodily injury per person ($25,000), bodily injury per accident ($50,000), and property damage per accident ($10,000).

Do I need liability insurance?

Yes. Most states (not all) require liability insurance to legally drive your vehicle. The required limits vary by state. You will check out your state on the state information pages.

Liability insurance also helps protect you by paying for covered damages and injuries, up to your limits, in at-fault accidents. If you don't have enough liability coverage, expenses above your limits may have to be paid out of pocket, so be mindful when choosing a limit that is right for you.

How much liability coverage do I need?

Liability coverage should be customized to fit your needs. It's not one-size-fits-all. Our coverage calculator can help you walk through a few questions and provide you with a recommendation.

Understanding Liability Coverage Limits

Understanding liability coverage limits is an essential aspect of deciding how much coverage you need and safeguarding your financial security. The amount your insurer will pay on your behalf after a covered liability claim is subject to the coverage limits you select. While each state requires a minimum coverage amount for bodily injury liability and property damage liability, drivers can choose to purchase additional coverage to fit their needs.

What are property damage liability limits?

Property damage liability limits indicate the maximum amount your insurance policy will pay for damage caused to someone else's property in the event of an accident you're found responsible for. For example, if you're in an at-fault accident in which you damage another person's car, your property damage liability coverage would kick in to cover these costs up to the limit you've chosen. Carefully selecting your limits is crucial because inadequate coverage could leave you personally responsible for repaying costly expenses beyond your coverage limits.

Bodily injury limits (per person)

Bodily injury limits (per person) are the maximum your insurance policy will cover for injuries sustained to another individual in an at-fault accident. This coverage will help pay for the medical expenses, rehabilitation, and potentially even the legal costs of a pedestrian or individual in another vehicle that you injured in an at-fault accident. Selecting appropriate limits is essential to ensure you have enough coverage to protect your financial well-being in the event of a significant accident.

Bodily injury limits (per accident)

Bodily injury limits (per accident) are similar to bodily injury limits (per person); however, they determine how much your policy will cover for injuries caused per incident in an at-fault accident rather than a singular person.

How insurers package bodily injury and property damage limits together

Many insurance providers combine bodily injury per person and per accident into a package, while some even offer combined single limits. Your policy might look something like this:

25/50/10 ($25,000 BI per person limit, $50,000 BI per accident limit, $10,000 property damage limit)

100/300/50 ($100,000 BI per person limit, $300,000 BI per accident limit, $50,000 property damage limit)

300k Combined Single Limit, which provides coverage for both bodily injury and property damage under the same limit.

These limits depend on the packages offered by your insurer. Your choice will influence the overall level of protection you have in place, so it's important to review and understand the packages available to you.

You may also want to consider an umbrella policy which provides additional coverage for more serious accidents and lawsuits.

How does auto liability insurance coverage work?

Learn more about the importance of having the right liability coverage as part of your GEICO car insurance policy!

Property damage liability coverage

Whether you're a seasoned policyholder or just starting to explore insurance options, this video breaks down the importance of having the right property liability insurance coverage.

Bodily injury liability coverage

This video is your guide to understanding how bodily injury liability coverage works to cover the medical expenses of others if you are at fault in an accident.

What is business liability insurance?

Business liability insurance, also known as commercial general liability insurance, is a shield that protects businesses from financial loss in various liability-related scenarios. Understanding this insurance offering is crucial for business owners not only looking to protect themselves, but also the well-being of others.

Understanding business liability insurance

Business liability insurance safeguards businesses in the event of any third-party liability claims or lawsuits. Business owners purchase these policies to ensure that if their company is sued for alleged negligence or wrongdoing, the insurance will cover legal expenses, settlements, or judgments, safeguarding the business's financial stability and reputation. Whether you run a small enterprise or a large corporation, having adequate business liability insurance is essential for mitigating risks and securing your assets.

How it's incorporated as general liability insurance for business owners

Business liability insurance is often incorporated as part of a broader insurance package known as General Liability Insurance for business owners. This comprehensive policy combines protection against various liability risks, including bodily injury, property damage, and personal or advertising injury claims. It provides business owners with peace of mind, ensuring their financial stability and allowing them to focus on their core operations without the constant worry of potential legal liabilities.

Please note:

The above is meant as general information and as general policy descriptions to help you understand the different types of coverages. These descriptions do not refer to any specific contract of insurance and they do not modify any definitions, exclusions or any other provision expressly stated in any contracts of insurance. We encourage you to speak to your insurance representative and to read your policy contract to fully understand your coverages.