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Definition
Liability coverage pays for property damage and bodily injury you cause to other people in an at-fault accident. It is the foundational required auto insurance coverage in nearly every US state. Liability has two components: Bodily Injury (BI) — covering medical bills, lost wages, and pain and suffering for injured parties — and Property Damage (PD) — covering vehicle repairs and property damage you cause. Limits are written as split limits (e.g., 100/300/100 = $100K per person / $300K per accident / $100K property damage) or as a combined single limit. Liability does NOT cover your own vehicle, your own medical bills, or damage from non-collision events — those require collision, comprehensive, and PIP/MedPay coverage.
Also Known As
third-party coverage
BI/PD coverage
bodily injury and property damage
auto liability
Used in Context
- Texas requires minimum 30/60/25 liability limits — but a driver with only minimum coverage caused $95,000 in injuries, leaving $65,000 in unpaid claims that the at-fault driver faced personally.
- An umbrella policy provides liability coverage above auto and home policy limits — homeowners with significant assets should carry at least $1M in umbrella coverage above their 100/300/100 base limits.
- California recently increased minimum liability requirements from 15/30/5 to 30/60/15 — the first increase since 1967 — reflecting decades of medical cost inflation.
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