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What does liability car insurance cover?

April 25, 2013

Advisor answers

Lisa Andrews

Lisa Andrews

MBA, CFP®
Madison, WI

Auto liability insurance pays for the damage you cause to property or people as a result of your negligence while driving (or, to be technical, while "using" the car...I recall a claim that occurred as a result of the insured hunting off the back of his truck, but that's another story). The maximum amount that the insurance company will pay is usually stated like this:

250/500/100 which means:

  • $250,000 of coverage maximum for any one person's injury related to the accident
  • $500,000 of coverage maximum for all injuries related to th...

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