Liability-only auto insurance includes two different levels of protection: bodily injury liability coverage and property damage liability coverage.
Personal injury liability cover
This type of liability protection can pay for another person’s medical bills, as well as their pain and suffering expenses and lost wages, after you’ve been convicted of a car accident.
Not only can this coverage pay for medical bills, but it can also be used to pay legal fees if you are sued following an accident. However, the payments do not exceed the liability limits of your policy. You are still responsible for amounts that exceed the limits of your insurance policy.
Property damage civil liability cover
This type of liability protection helps pay for repairs when you damage someone else’s property, including their vehicle.
This type of coverage can also step in to pay for repairs to other types of property you damage, such as a fence or building you crash into.
When buying auto insurance, note that the limits of basic liability-only auto insurance policies may be insufficient in certain types of auto accidents. If you cause an accident that causes damage beyond your policy limits, you are still personally liable for any additional costs and damages. If you cannot meet these financial obligations, you could face legal consequences, as well as garnished wages or liens on assets you own.
Ultimately, that’s the tradeoff you make when you buy liability-only insurance with limited coverage. This type of insurance helps drivers meet the legal requirements of their state at the lowest possible cost, but it can also leave you financially vulnerable if you are involved in an accident resulting in expensive medical bills, property damage, or of them.
Related: Third Party Liability vs Full Coverage Auto Insurance
How to read automobile liability insurance limits
People who purchase liability-only auto insurance should understand the policy limits of this type of insurance and how they work. Generally speaking, insurers group bodily injury and property damage limits together using an easy-to-understand format that looks like this: 25/50/10.
With liability-only coverage with limits of 25/50/10, the policy offers:
- $25,000 in bodily injury liability insurance per person
- $50,000 in liability insurance for bodily injury per accident
- $10,000 in property damage liability insurance per accident
With limits of 50/100/25, on the other hand, the policy offers:
- $50,000 in bodily injury liability insurance per person
- $100,000 in liability insurance for bodily injury per accident
- $25,000 in property damage liability insurance per accident