Liability car insurance is the foundational coverage required by state law. It pays for injuries and property damage you cause to others in an at-fault accident. It does not cover your own injuries or vehicle repairs. The core components are Bodily Injury Liability (BI), which covers others' medical expenses, and Property Damage Liability (PD), which pays for damage you cause to someone else's car or property.
This coverage is crucial because it protects your personal assets. If you cause a serious accident and are underinsured, the other party could sue you for costs exceeding your policy limits. State minimum requirements are often insufficient. For example, California's minimum is $15,000 per person/$30,000 per accident for BI and $5,000 for PD, which can be exhausted quickly in a major collision.
| Coverage Type | Typical State Minimum (Per Accident) | Recommended Coverage | What It Pays For |
|---|
| Bodily Injury (BI) | $25,000/$50,000 | $100,000/$300,000 | Medical bills, lost wages, pain and suffering for others. |
| Property Damage (PD) | $10,000 - $25,000 | $50,000 - $100,000 | Repairs to another vehicle, fences, buildings, etc. |
| Single Limit Liability | $50,000 (in some states) | $300,000 | A combined single amount for all BI and PD costs. |
Choosing higher limits than your state's minimum is a wise financial decision. An umbrella liability policy can provide additional protection beyond your auto insurance limits, starting at $1 million in coverage. Liability insurance is a non-negotiable part of responsible driving, directly addressing your legal and financial responsibilities to others on the road.
