What does a liability policy cover?

A liability policy primarily covers damages that you cause to another person’s vehicle or body in the event of an accident for which you are found to be at fault. This is essential in protecting you against financial loss arising from legal claims made by others due to injuries or damages you may cause while driving.

Liability coverage typically includes two major components: bodily injury liability, which addresses medical expenses, lost wages, and pain and suffering for the injured party, and property damage liability, which covers repair or replacement costs for the other party's property, such as their vehicle.

While damage to your own vehicle and medical expenses for you and your passengers are important aspects of auto insurance, they are covered under other types of policies, such as collision or comprehensive coverage, rather than a liability policy. Personal property losses pertain to coverage beyond vehicle accidents, often requiring specific policies that do not fall under the liability umbrella. Understanding the role of liability coverage is vital for responsible car ownership and can help in making informed decisions about insurance needs.