Definition and Core Purpose
Auto liability insurance is a mandatory form of coverage that pays for bodily injury and property damage you cause to others in a vehicle accident. It does not cover your own injuries or vehicle repairs.
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Coverage Components
Liability splits into two parts: bodily injury liability (BIL) and property damage liability (PDL). BIL reimburses medical expenses, lost wages, and legal costs for injured parties, while PDL covers repair or replacement of the other party's vehicle or property.
State Requirements and Limits
Each state sets minimum liability limits, expressed as three numbers (e.g., 25/50/15). The first two figures represent BIL per person and per accident; the third is the PDL limit per incident. Drivers can purchase higher limits for greater protection.
How It Works After a Claim
When a claim is filed, the insurer investigates fault, then pays the entitled amounts up to the policy limits. If damages exceed those limits, the driver may be personally liable for the remainder.
Choosing the Right Coverage
Consider factors such as vehicle value, personal assets, and driving habits. Higher limits reduce the risk of out‑of‑pocket expenses, while lower limits keep premiums affordable.
Comparison of Typical Limits
| Limit Set | BIL per Person | BIL per Accident | PDL per Accident |
|---|---|---|---|
| Minimum State | $25,000 | $50,000 | $15,000 |
| Standard Recommended | $100,000 | $300,000 | $50,000 |
| High‑Net‑Worth | $250,000 | $500,000 | $100,000 |