Liability Insurance: The Legal Foundation of Every Policy

Overview: Liability insurance is the coverage that protects others from damage or injury caused by you. It’s the legal minimum in most states and is often split into two parts: Bodily Injury Liability (BI) and Property Damage Liability (PD).

What It Covers:

Bodily Injury: Medical expenses, pain and suffering, and lost wages of the other party.

Property Damage: Repairs to another person’s car, fences, mailboxes, and even public property.

Real-World Example: You run a red light and hit another car. Liability insurance pays for the other driver’s injuries and vehicle damage—but not your own.