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What’s covered under your liability limits on your car insurance policy?

Your auto liability insurance primarily consists of two types of coverage. Those are for bodily injury and property damage, but you’ll want to distinguish between what you’re getting and what you’re not getting.

Your policy limits

All states except for New Hampshire have mandatory minimum liability insurance laws. Although policy limits might be different from state to state, each state has set statutory minimum liability limits of coverage for bodily injury and property damage.

Bodily injury policy limits

Nevada provides a good example of statutory bodily injury policy limits. It requires a minimum $15,000 coverage per person and $30,000 per occurrence. That $15,000 is the maximum that your insurer will pay if you’re in an accident and injure one person. If you injure two or more people in an accident, $30,000 is the maximum your insurer will pay, even if you injure four people. You’ll want to check your state’s mandatory minimum liability insurance coverage laws, especially if you live in a no-fault insurance state.

Property damage policy limits

If you cause an accident, it’s likely that you’ll cause damage in excess of your deductible amount. The Nevada statute requires only $10,000 of property damage coverage. If you total out somebody’s new car, your insurer would pay the first $10,000. You’d be personally responsible for the balance. Imagine totaling out somebody’s new Mercedes-Benz with you only carrying $10,000 of property damage coverage. Not only did you cause an accident, but you caused a very significant financial problem for yourself too.

What you’re not getting

You’re insured for bodily injury and property damage that the other guy might sustain, but with liability coverage only, you have no coverage whatsoever to get your vehicle repaired or replaced. You also have no coverage for any medical bills that you might incur. Should an uninsured driver hit you, there’s no coverage for that occurrence either. If you’re hospitalized in an accident involving another driver with minimum liability insurance, you’ll be liable for the balance of your hospital bills after their bodily injury coverage is exhausted.


Talk with your agent about adding coverage and increasing your policy limits. Mandatory minimum coverage won’t pay any of your medical bills, and it doesn’t pay for the repair or replacement of your car either.