What liability-only coverage does and does not pay
Liability-only auto insurance covers costs you owe after an at-fault accident that injure someone else or damage their property. It pays for the other party's medical bills, lost wages, and repairs to their vehicle, and it covers your legal defense if you are sued, up to your policy limits. It does not cover your own injuries, your car repairs, or theft. If you only carry liability coverage and cause a crash, you must pay to fix your own vehicle and any medical costs you incur out of pocket.
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Bodily injury liability: what it pays and how limits work
Bodily injury liability (BI) pays medical costs, lost income, and related damages for people injured in an accident you cause. Policies show two numbers: per-person and per-episode limits. For example, 100/300/100 means up to $100,000 per person, $300,000 total per accident for injuries, and $100,000 for property damage. Courts and settlements can exceed these amounts, which is why carrying higher limits shifts more financial risk away from you. Medical Payments (MedPay) and Personal Injury Protection (PIP) are separate coverages and are not part of liability insurance.
Property damage liability: what it pays and typical limits
Property damage liability (PD) pays to repair or replace another driver's vehicle or other property you damage, such as a fence or guardrail. Limits are usually aligned with your BI limits, such as the common 100/300/100 shown below. If repair costs exceed your PD limit, you cover the difference. Liability policies also pay for your legal defense and associated fees if you are sued, which can quickly add up in serious injury cases.
- What liability covers: the other person's injuries, the other person's property damage, and your legal defense costs.
- What liability excludes: your own injuries, your car repairs, rental reimbursement, and theft or vandalism.
| Attribute | Verified Detail | Source Type |
|---|---|---|
| Bodily injury liability | Pays medical costs and damages for injured third parties when you are at fault | Policy definitions |
| Property damage liability | Pays to repair or replace third-party property you damage | Policy definitions |
| Per-person limit | Maximum payout for injuries to one individual in an accident | Policy declarations |
| Per-accident limit (bodily injury) | Maximum payout for all injuries in a single accident | Policy declarations |
| Property damage limit | Maximum payout for damage to another person's property per accident | Policy declarations |
| Deductible | Not applicable; liability coverage does not have a deductible | Policy declarations |
| Exclusions | Your injuries, your car, theft, and intentional damage | Policy declarations |
When liability-only coverage is enough
Liability-only auto insurance is enough if you can afford to pay to fix your own car and cover your medical bills after an at-fault crash. In practice, this means you have enough savings to handle your share of damage. If you carry a mortgage, dependents, or limited cash reserves, higher limits or added protection such as uninsured/underinsured motorist and medical payments coverage can reduce out-of-pocket risk. Policies typically cap payouts per person and per accident, so severe injuries can expose you to substantial remaining liability.
Key limits and common policy options
Auto liability limits vary by state and company, but common packages include 100/300/100, 250/500/100, and 500/1000/500. The first number is the per-person injury limit, the second is the per-accident injury limit, and the third is the property damage limit. Some insurers also offer an umbrella or excess policy that layers additional limits above your base auto and home coverage once underlying limits are exhausted. Umbrella policies typically require higher underlying limits and cover catastrophic liability risk.