How it works
Car liability coverage has two parts:
- Bodily injury liability pays for other people's injuries, such as the other driver's and passengers' medical bills.
- Property damage liability pays to repair or replace the other driver's car or other property you damage.
Liability coverage pays only up to the limits you choose. The Texas Department of Insurance warns that minimum limits can be too low after a multi-car crash or when the other car is totaled, and that you may have to pay the rest yourself or be sued for it.
Liability is the coverage states make drivers carry. It is legally required in 49 states and the District of Columbia, which is why it is the base of almost every auto policy. Coverage for your own car comes from collision and comprehensive, which are optional unless a lender or leasing company requires them.
Related terms
Frequently asked questions
Does liability insurance cover my own car?
No. Repairs to your car come from collision coverage for crashes, or comprehensive coverage for theft, weather and similar damage.
Sources
- California Department of Insurance, Automobile Insurance Terms definition of liability insurance
- Texas Department of Insurance, Auto insurance guide what liability pays, risks of low limits, lender requirements
- Insurance Research Council, Uninsured and Underinsured Motorists: 2017–2023 (press release) as of February 20, 2025
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