Liability insurance pays for injuries and damage you cause to other people, and nearly every state requires it. Triple-I says state-required minimums may not cover the cost of a serious accident, so it is worth considering higher limits: if you are in a serious accident, you may be sued for a large sum, and it recommends buying enough to protect assets such as your home and savings. These pages describe U.S. insurance in general terms; rules, required coverage and prices differ by state and insurer, so check your state insurance department and your policy. We give no rates, because none of the sources we read give current ones.
What does liability insurance cover?
- Bodily injury liability: costs of injuries and death that you or another driver of your car cause. It also covers you and listed family members when driving someone else’s car with permission.
- Property damage liability: damage you cause to another car or other property such as lamp posts, telephone poles, fences and buildings.
Liability does not cover your own car or your own injuries; see auto insurance basics.
Why might state minimums not be enough?
Triple-I says state minimums may not cover the costs of a serious accident. Because each coverage is priced separately, you can raise limits and customise cover to your needs and budget. When you compare quotes, the limits must match or you cannot compare fairly; see how to compare car insurance quotes.
What is umbrella liability?
Triple-I defines it as extra coverage beyond the limits of your regular liability policies, giving an additional layer of protection for your assets if you are sued. It also covers claims under your homeowners policy.
What about uninsured and underinsured drivers?
Uninsured motorist coverage reimburses you when an accident is caused by an uninsured driver or in a hit-and-run, and underinsured motorist coverage makes up the difference when the at-fault driver’s limits do not cover your losses, says Triple-I. It recommends considering these even if optional in your state.
Frequently asked questions
What liability limits should I buy?
Triple-I does not give a number: it recommends more than the state minimum, enough to protect your assets. Ask an agent or your state insurance department about your situation.
Does liability cover damage to my car?
No. That is collision or comprehensive; see collision vs comprehensive.
Sources: Triple-I, “Auto insurance basics: understanding your coverage”, “What is covered by a basic auto insurance policy?” and “Auto insurance jargon buster” (iii.org, read 13 November 2026; no publication date shown).