What Does Liability Insurance Cover?

Woman signing a car insurance policy, the agent is holding the document

If you are wondering “What does liability insurance cover?” or “What is liability insurance coverage?” you’ve come to the right place.  While auto liability insurance is required in most states, many people don’t fully understand what liability coverage pays for. It’s a two-fold plan that covers both bodily injury and property damage. While these are two separate categories, they are two important required areas of coverage. If you’re at fault for people or property damage, then liability insurance helps cover the expenses. If you’re wondering what liability insurance coverage pays for, or how liability insurance works, learn more with the finance team at Nyle Maxwell CDJR of Taylor today!

How Does Liability Insurance Work for Bodily Injuries?

Let’s break down the auto liability insurance definitions — while liability insurance covers both bodily injuries and property damage, they each can have their own set limits. Most states will set minimum coverage limits you’ll need to abide by, but other than that, you can set your own limits. Here’s what liability coverage pays for in terms of bodily injuries:

  • Medical and hospital bills
  • Long-term nursing care
  • Rehab
  • Pain and suffering
  • Funeral expenses in case of a fatal accident
  • Lost earnings


How Does Liability Insurance Work for Property Damage?

Now that we’ve talked a little bit about auto liability insurance definitions and bodily injury coverage, let’s dive into what liability insurance coverage pays for in terms of property damage. This coverage is for the victim of the accident rather than the driver at fault.

  • Vehicle damage
  • Parts replacements
  • Repair expenses
  • Property damage, including house/personal property
  • Pets

Liability Coverage Limits Information

Once you set up your auto insurance plan with an agent in Georgetown, you’ll want to work on setting coverage limits. You’ll have the option to either split limits or house them as a single limit. This is how it will work:

  • Split limit: This allows you to set individual maximums for the following — bodily injury payments per person, all people injured, or all property damage
  • Single limit: Rather than setting total limits per person, this is a lump sum that will be spread across all parties or properties injured or damaged

Learn More About Insurance Coverage at Nyle Maxwell CDJR of Taylor

Still have questions about what liability insurance covers or need assistance with some auto liability insurance definitions, don’t hesitate to contact us at your convenience! We’re happy to walk you through auto insurance coverage and financing options. Whether you need help trading in your car or improving your credit score, our finance team can provide you with the information you need. Want to visit us in person? We’re located near Cameron and College Station!

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