auto coverage
Liability Insurance
Pays for injuries or property damage you cause to others — the legal foundation of every auto policy.
Typical Low
$400/yr
Typical Mid
$900/yr
Typical High
$1800/yr
What it is
Liability insurance is the legally required core of every auto and most home policies. It pays third parties when you are at fault — their medical bills, vehicle repairs, lost wages, and legal defense if you are sued. It does not pay you. Limits are written as three numbers, e.g. 100/300/100 = $100k per person bodily injury, $300k per accident, $100k property damage.
Who needs it
- Every licensed driver
- Every homeowner and renter
- Small business owners
Common mistakes
- Carrying state minimum limits — a single hospital stay easily exceeds $25k.
- Confusing liability with collision (it does not pay for your own car).
- Forgetting umbrella liability above $500k net worth.
Recommendations
- Carry at least 100/300/100 — the standard for most middle-income households.
- Add UM/UIM at matching limits.
- Layer a $1M+ umbrella once net worth exceeds your underlying limits.
Insurance Health Score impact
Strong liability adds 18-25 points to your Insurance Health Score; state-minimum limits subtract 10-15.