Liability insurance
Coverage that protects you when covered conduct makes you legally responsible for another person's bodily injury, property damage or other covered loss. Your insurer may pay the covered damages and defend you, up to the policy's limits. It does not generally pay for your own vehicle, property or injuries.
Also called: liability, liability coverage, liability limits
Liability insurance responds when you are legally responsible for harm to someone else: an injury you caused, or damage to another person's car or property. The insurer pays covered damages up to the policy limit and usually provides a legal defense, according to the California Department of Insurance (opens in a new tab). The harms it commonly covers are bodily injury and property damage, and some business policies add other categories. Your declarations page shows the limits you selected, while the full policy decides what those limits cover.
How the limits work, with real numbers
Take the New York minimum auto liability structure of $25,000 per person and $50,000 per accident for bodily injury and $10,000 per accident for property damage, as listed by the New York Department of Financial Services (opens in a new tab). The claim amounts are illustrative.
Hover or tap a row to highlight it.
| Claim | Covered damages | Limit | Insurer pays | Above the limit |
|---|---|---|---|---|
| One injured person | $40,000 | $25,000 per person | $25,000 | $15,000 |
| Another person's vehicle | $12,000 | $10,000 per accident | $10,000 | $2,000 |
| Total | $52,000 | $35,000 | $17,000 |
The $17,000 above the limits may become your personal responsibility, subject to the facts, legal liability, settlements, judgments, exclusions and any other applicable insurance. Defense costs for auto liability are paid by the insurer in addition to the bodily injury and property damage limits, according to the NAIC (opens in a new tab).
Limit choices and what each changes
Higher limits raise the most the insurer can pay, and they generally raise the premium because the insurer takes on more potential responsibility. They do not remove exclusions.
- Split limits. A 25/50/10 policy means $25,000 per injured person, $50,000 for all injuries in one accident and $10,000 for property damage. Higher splits include $50,000/$100,000, $100,000/$300,000 and $250,000/$500,000.
- Combined single limits. One amount, such as $100,000, $300,000 or $500,000, covers bodily injury and property damage from one accident.
- Uninsured and underinsured motorist limits. These protect you against qualifying injuries caused by a driver with no insurance or too little.
- Umbrella limits. An umbrella adds liability protection above underlying auto, homeowners, renters or business limits, and the NAIC identifies common business umbrella limits from $1 million to $5 million, according to its small business page (opens in a new tab).
Premium also depends on underwriting, location, vehicle, drivers, claims history, business activity and insurer rules. The average cost of car insurance in Connecticut gives a local price reference.
Where you meet the term
Liability appears in several kinds of policy, each with its own wording.
- Auto: bodily injury liability, property damage liability, uninsured or underinsured motorist coverage, and sometimes medical payments or personal injury protection.
- Homeowners and condo: personal liability, and medical payments to others for homeowners.
- Renters: personal liability for bodily injury or property damage the renter causes. It does not insure the landlord's building.
- Business: general, commercial auto, professional, product, employment-related and cyber liability, plus umbrella or excess liability.
It is not normally the main coverage in life, health or standard pet medical insurance. On paper, it appears on a quote, binder, declarations page, insuring agreement, renewal notice, certificate of insurance, reservation-of-rights letter or claim letter. The guide to comprehensive vs collision insurance covers coverage for your own vehicle.
What Connecticut and New York law require
For motor vehicles, Connecticut sets the minimums. The Connecticut Insurance Department (opens in a new tab) lists $25,000 per person and $50,000 per accident for bodily injury, plus $25,000 per accident for property damage, or a $50,000 combined single limit. Proof of financial responsibility is required under Conn. Gen. Stat. § 14-112 (opens in a new tab). Conn. Gen. Stat. § 38a-334 (opens in a new tab) sets minimum provisions for auto liability policies, and Conn. Gen. Stat. § 38a-336 (opens in a new tab) requires uninsured and underinsured motorist coverage, generally matching your bodily injury limits unless you make a legally effective written request for lower limits, subject to statutory minimums. The guide to Connecticut car insurance requirements walks through them.
New York requires $25,000 for bodily injury to one person, $50,000 for two or more persons and $10,000 for property damage in one accident, plus no-fault personal injury protection and uninsured motorist coverage. Vehicle and Traffic Law § 311 (opens in a new tab) defines proof of financial security, and § 312 (opens in a new tab) generally bars registration without it. Insurance Law § 3420 (opens in a new tab) requires notice rules, direct notice rights for injured claimants and timely written disclaimers for covered death or bodily injury claims.
Questions to ask an agent or insurer
- "What are my bodily injury and property damage limits, and are they split limits or a combined single limit?" The structure sets the most available for one person, several injured people and property damage.
- "Does the coverage include a legal defense, and are defense costs inside or outside the limit?" The answer changes how much remains for a settlement or judgment.
- "Which people, vehicles, properties, business activities and occasional uses are insured, and which are excluded or need an endorsement?" These decide whether an event is a covered claim.
- "What would I owe if the claim exceeds my limit?" Excess damages may remain your responsibility.
- "What notice, cooperation, proof and deadline rules apply after an accident or loss?" Policy conditions and state law can affect claim handling.
Frequently asked questions
Limits, exclusions and the kind of policy decide what liability coverage pays.
Does liability insurance cover my own car?
Usually not. Auto liability generally pays for injury or property damage caused to others. Collision and comprehensive address qualifying damage to your vehicle, and medical payments, personal injury protection or health coverage may address your own injuries, according to the NAIC (opens in a new tab).
Is liability insurance the same as full coverage?
No. In an NAIC consumer explanation, full coverage generally means comprehensive and collision for your vehicle, while liability covers harm to others, per the NAIC (opens in a new tab). A policy may contain both, and a lender may require comprehensive and collision.
What happens if damages exceed my liability limits?
The insurer's covered payment is generally limited to the policy limit. The California Department of Insurance (opens in a new tab) says the policyholder remains responsible for damage above the purchased limits, so a serious injury or an expensive vehicle can leave an excess judgment or settlement.
Does renters insurance include liability insurance?
Most renters policies include personal liability along with personal property coverage, according to the NAIC (opens in a new tab). The liability section addresses covered claims or lawsuits for bodily injury or property damage the renter causes, subject to policy terms and limits.