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What is Auto Liability Insurance and What Does it Cover?
June 15, 2026
Auto liability insurance covers expenses associated with the other driver’s property damage and injuries if you are at fault in an accident. There are two parts to auto liability insurance coverage: property damage liability and bodily injury liability.
What Auto Liability Insurance Covers
Bodily injury liability coverage pays for medical bills and lost wages for the victim. This type of insurance can provide coverage for:
- Medical treatment
- Hospital bills
- Lost income due to the injury
- Rehabilitation costs
Property damage insurance coverage takes care of repairing the victim’s vehicle as well as any stationary property damage, such as fences, mailboxes, or homes. This type of insurance can also cover rental auto expenses while the damaged vehicle is at the repair shop.
Understanding Auto Liability Insurance and How Auto Liability Insurance Works
If you are found to be at fault in an accident, you are responsible for the injuries and property damage sustained by the victim(s). Auto liability insurance will provide coverage for those expenses, as well as your legal fees, if the victim(s) sue you because of the accident. When the other driver or property owner files a claim with your liability insurance company, the amount paid is determined by the limits of your policy.
Liability Coverage Limits
Most states, including California, Colorado, Idaho, Oregon, Washington, and Wyoming, require that drivers carry a minimum amount of auto liability insurance. The specific amount of coverage drivers must carry varies among states.
Minimum Liability Insurance Requirements per State
Minimum auto liability insurance coverage refers to the lowest amount of liability coverage required by the state in which you live to be compliant with that state’s auto insurance laws. Bodily injury and property damage liability requirements are expressed in most states with limits, such as 25/50/25.
This is a shorthand term for the legally mandated minimum coverage limits. The first number represented is the maximum amount that will be paid out per victim. The second number is the total maximum amount that will be paid for all injuries sustained in a single accident. The third number is the maximum amount that will be paid for all property damage incurred in a single accident. In an example such as 25/50/25, this would represent $25,000, $50,000, and $25,000 in coverage.
In some states, additional types of coverage are also required, such as personal injury protection (PIP) and Uninsured/Underinsured Motorist (UM/UIM). Personal injury protection coverage will cover any medical expenses and associated costs for the driver and passengers, regardless of who is at fault for the accident. PIP also covers childcare, lost wages, and funeral expenses.
Uninsured and underinsured motorist insurance provides coverage for any vehicle damage and/or medical expenses (up to the limit of the policy) when the at-fault driver either has no insurance at all or the insurance coverage is not sufficient.
| California | 30/60/15 |
| Colorado | 25/50/15 |
| Idaho | 25/50/15 |
| Oregon | 25/50/20 **UM, PIP required |
| Washington | 25/50/10 |
| Wyoming | 25/50/20 |
Importance of Adequate Liability Coverage for Drivers
Adequate liability coverage for drivers is essential to protect you in the event you are found to be at fault in an accident. Without sufficient auto liability insurance, you could face significant out-of-pocket expenses. At the least, you must carry the minimum amount of coverage as required by the state in which you live. However, keep in mind that if those limits are exhausted, you will still be responsible for any remaining bodily injury and property damage expenses if you are at fault in an accident. Therefore, it is imperative that you select coverage limits carefully to protect your financial interests.
FAQs
How Much Does Auto Liability Insurance Coverage Cost?
The cost of auto liability insurance depends on multiple factors, including the state in which it is purchased and the amount of coverage purchased. Higher limits typically increase the premium cost.
What Isn’t Covered by Auto Liability Insurance?
Typically, the following expenses are not covered by liability insurance:
- Damage to your own vehicle
- Your own injuries and medical bills
- Personal injury protection (PIP)
- Any costs covered by Comprehensive or Collision Coverage
Is Liability Insurance Required?
Yes, minimum liability insurance coverage is required to drive legally in all states, except for New Hampshire, where drivers must demonstrate they are able to accept financial responsibility in the event they cause an accident.
Key Takeaways
Auto liability insurance is a necessary part of owning and operating a vehicle. In addition to being a legal requirement, auto liability insurance coverage also provides crucial protection for your financial well-being. Selecting the right limits offers the best level of protection. Our network of trusted independent agents would be happy to guide you through coverage options, review your policy limits, and ensure you are fully protected for your specific situation.
FAQs
The content available via Granwest.com is for informational purposes only and may not be used for any other purpose. Content provided or expressed on Granwest.com, including that of third parties, may not reflect Granwest policies or conform to any agreement you may have with Granwest and its subsidiary companies. Please contact a licensed insurance agent to obtain particular advice.
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