Liability Insurance

Liability insurance coverage takes effect when you are legally responsible for an accident. It pays for expenses to the other party in the accident. This covers bodily injury and property damage to the other person, including: payment for the other party's medical bills, damaged property, car repairs, legal expenses and fees, emotional distress, and pain and suffering.

Almost all states require a minimum limit of liability insurance for registered drivers. The auto insurance company will only pay out up to a certain limit for each accident. If the judgement against you is higher, you will be required to pay out-of-pocket the difference not paid by your insurer. The Insurance Information Institute recommends that you buy at least $100,000 of bodily injury protection per person and $300,000 per accident to protect yourself financially. You may also consider an umbrella policy which covers you when the underlying policy is exhausted.

Liability amounts are usually written as three numbers separated by slashes.
First number: bodily injury liability maximum for one person's injuries
Second number: bodily injury liability maximum for all injuries in one accident
Third number: property damage liability maximum for one accident

Type of liability insurance coverage includes:

Bodily Injury Liability Coverage

Property Damage Liability Coverage