What liability coverage is
Liability coverage pays when you cause injury to someone else or damage their property. It also covers legal defense costs. It does not pay for your own injuries or your own vehicle.
Why the amount of coverage matters
If the cost of an accident is higher than your liability limit, you must pay the rest out of pocket. Medical bills, lawsuits, and property damage can exceed state minimums quickly, which is why many people choose higher limits.
How to choose a limit that fits your situation
A good starting point is to match your coverage to what you could lose in a lawsuit. Consider:
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Your assets — home, savings, investments, and income.
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Your risk level — long commutes, teen drivers, high‑traffic areas.
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Your comfort with financial exposure — how much risk you’re willing to carry.
Common coverage choices
This table shows how people often match limits to their financial situation:
When to get guidance
An insurance advisor can review your assets, risks, and state requirements to recommend limits that protect you without overspending.