Liability car insurance

What it pays for

Liability pays other people when an accident is your fault. It splits into two coverages that are usually quoted together.

• Bodily injury liability. Their medical bills, their lost wages, and what a court awards for pain and suffering.
• Property damage liability. Their vehicle, and anything else you hit — a fence, a storefront, a light pole.

It also pays for your legal defence if you are sued over a covered accident, and that cost does not come out of your limit.

What the three numbers mean

Written as 30/60/25, the numbers are in thousands.

• 30 — the most paid for injuries to any one person.
• 60 — the most paid for all injuries in one accident.
• 25 — the most paid for the other party’s property.

Some policies are written with a single combined limit instead, which is one pot for the whole accident rather than three ceilings.

What happens past the limit

The carrier pays up to the number and stops. Everything above it is yours personally — savings, wages, and in some circumstances a lien against property.

This is the scenario worth pricing. One serious injury and one late-model vehicle reaches a state-minimum limit without anything unusual happening at all.

What it does not pay for

• Your own car — that is collision.
• Your own injuries — that is MedPay, PIP or health insurance.
• Damage when the other driver is at fault — that is their liability, or your uninsured-motorist coverage if they have none.
• Anything that happens on purpose.

Where to set it

Higher liability limits are among the cheapest coverage you will buy, because the large claims they protect against are rare. The first step up from the state minimum usually costs far less than people expect, and the step after that less again.

A useful test: if a claim were twice your current limit, what would the rest of it come out of?