Liability Insurance for Drivers: How Much Do You Require?

Automobile insurance is designed to protect you and your automobile if you’re involved in an accident, your car is stolen or vandalized, or it’s damaged in a natural disaster. Your policy’s personal liability coverage protects you if you’re deemed to be at fault in an accident that injures someone else or damages their property. Every state with the exception of New Hampshire has a minimum amount of liability coverage that you’re expected to purchase when insuring a vehicle.1



  • Personal liability coverage protects you financially in the event you’re at fault in an automobile accident that injures another person or damages someone’s property.
  • Nearly all states require car owners to have liability coverage as part of the vehicle insurance.
  • States set minimum amounts of liability coverage, but you can–and often should–buy more.

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What is Personal Liability Insurance?

Car Insurance policies may feature several different coverage types, including:

  • Bodily injury liability
  • Property damage liability
  • Personal injury protection (in some states)
  • Collision coverage
  • Comprehensive coverage
  • Uninsured/underinsured driver policy
 The first two things on this list–bodily injury and property damage–reflect the policy’s liability coverage.

Bodily injury liability coverage, or BI, covers bodily injuries to another person if you’re at fault in an accident. So, by means of example, if you rear-end someone with your car and they experience back and neck pain that needs an X-ray or continuing treatment, your bodily injury liability coverage could cover some or all those costs, depending upon your policy limits.2

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Property damage liability coverage, or PD, covers damage to someone else’s home if you’re at fault in an accident. This coverage can extend to another person’s vehicle along with other property, like structures or fencing. This kind of liability insurance covers some or all of the cost of fixing the damage. 2


Liability insurance does not cover your medical expenses or repairs to your vehicle if you’re involved in an incident. Those are covered by different parts of your car or truck policy.

Personal Injury Insurance Limits

Excluding New Hampshire, every state sets a minimum threshold on the amount of private liability insurance motorists will have to have. Based on your state’s requirements, you may see three different liability limitations included on your policy:

  • Bodily injury liability limit per individual
  • Bodily injury liability limit per accident
  • Property damage liability limit

Bodily injury liability limit per individual

The bodily injury liability limit per individual is the maximum amount your auto insurance provider will cover toward someone else’s medical expenses if you’re involved in an accident and are to blame. So, by means of instance, you might be insured up to $25,000 per individual if an accident results in bodily injuries to someone else.

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Bodily injury liability limit per accident

The bodily injury liability limit each accident is the maximum amount your insurance provider will pay for medical expenses for a single mishap. So, say you have a bodily injury liability limit per accident of $50,000. That’s the most your policy would pay toward medical costs, irrespective of the number of people were hurt in the accident.2

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Property damage liability limit

Your property damage liability limit is the maximum amount your insurance provider will cover property damages if you’re at fault in an accident. If your policy has all three types of liability insurance, it’s typical to get these amounts expressed in an abbreviated format. By means of instance, if you’ve got a $100,000 bodily injury liability limit per individual, a $300,000 bodily injury liability limit per accident, and a $50,000 property damage liability limitation, it might be cited as 100/300/50 on your policy. 3

Why Do You Need Personal Liability Insurance?

Personal liability insurance is designed to protect you against significant financial losses associated with an accident that you caused. If you are in an accident and injure somebody, resulting in a $50,000 medical bill, you would be responsible for paying it out of pocket if you don’t have bodily injury liability coverage. And in case you can’t come up the money to pay, you could be sued in court.

Other policies on your insurance policy serve other purposes. Collision coverage, for example, pays for damages to your car after an accident. Extensive coverage may cover damages which aren’t strictly accident-related, like those due to falling objects. And medical payments coverage would cover your medical expenses if you’re hurt in an accident. Your regular health insurance can help cover, as well.2

In the event you have substantial assets which might be at risk in a lawsuit, it’s worth considering an excess umbrella coverage, which might increase your liability coverage to $1 million or more.

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How Much Personal Injury Insurance Should You Buy?

At a minimum, your liability coverage must satisfy the requirements for your problem. The amount you’ll pay for this insurance will depend on several factors, including the policy’s coverage amounts and your driving record.2

In most nations, the minimum coverage requirement is 25/50/25, meaning:

  • $25,000 bodily injury liability limit per individual
  • $50,000 bodily injury liability limit per accident
  • $25,000 property damage liability limit

But if those limits are adequate can depend on an assortment of things, like your financial resources.

Say you are in a crash that causes injuries to three people. Their complete medical costs come to $75,000. For people that have a physical injury liability limit of $50,000 per accident, you may need to think about another $25,000 to pay for their medical bills which are remaining.

Having more personal liability insurance plan can help prevent situations where you may be required to pay massive amounts out of pocket after an incident. But remember that increasing your coverage limits will also increase your premium costs. If you’re not sure of how much personal liability insurance to buy, your insurance agent may be able to assist.

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