What does liability insurance cover?

Liability coverage may apply in a variety of situations where you're liable for someone else's injuries or damaged property. Here are some examples of what liability coverage may cover, broken out by type of insurance:

Vehicle insurance (including auto, motorcycle, RV, & others)

  • Injuries you cause to someone else while driving
  • Damage you cause to other vehicles while driving
  • Damage you cause to someone else's property, such as a mailbox or street sign
  • Legal expenses for accident-related lawsuits

Property insurance (including homeowners, condo, renters, & others)

  • Injuries that occur on your property that you're responsible for
  • Damage to other people's property that you're responsible for
  • Legal expenses for lawsuits related to injuries or property damage

Keep in mind that liability insurance coverage doesn't cover your own injuries or damaged property. It only applies in situations where you're legally responsible for someone else's damages.

How much liability coverage do I need?

Typically, you should select a limit that matches or exceeds your total net worth. This way, your assets are well-protected if you're legally responsible for someone else's injuries or property damage. Learn more about choosing liability coverage limits for vehicle or property insurance:

Do I need liability insurance?

Nearly every state requires car insurance that includes liability coverage to drive legally. You're typically required to carry the same amount of liability coverage on your motorcycle and RV policy as you do on your auto policy.

For property insurance, there are no states that require personal liability coverage. However, mortgage lenders typically require borrowers to purchase homeowners insurance, which includes personal liability coverage, as a part of the loan agreement. Some landlords and apartment complexes may also require you to carry renters insurance, which also includes personal liability coverage.

Even if you aren't required to carry some form of liability coverage, it's worth considering for the peace of mind it can offer.