What Does Auto Liability Insurance Cover?

A collision can result in thousands of dollars of damage, and if you’re the one responsible for the accident, you will be on the hook for covering the other person’s bills. 

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As a Nevada resident, you are required to carry “liability insurance”, which is used to pay for any:

Bodily injury” (hospital bills including any pain or suffering or lost time at work).

Property damage” (to their car or property) that may result from an accident that you caused.

All About Auto Liability Insurance

The most conscientious drivers find themselves responsible for an accident now and again. There are no shortages of dangers and distractions when you’re behind the wheel of a vehicle. At some point “liability insurance”, which all Nevada drivers are required to carry, may keep you from having to pay for the damages that result from an accident that you caused. Keep in mind, however, your policy will only cover you up to your auto insurance policy limit. This insurance not only pays the repair or replacement costs of the vehicle that you hit, but it can also take care of any repairs that may be necessary if you run into someone’s fence, mailbox their home, or their person. Again, having enough liability coverage if you put someone in the hospital is going to be very important. Keeping them from working, or their pain and suffering is a factor too.

How Much Liability Insurance Do I Have?

Your auto insurance policy expresses your liability coverage in three numbers, for example, 25/50/20, which tells how many thousands of dollars you have in coverage. So, 25/50/20 is really $25,000/$50,000/$20,000.


The first two numbers refer to your “bodily injury” coverage. This means the other driver’s body and his/her passengers would be covered. The first number 25 would cover up to $25,000 for the other driver or any one person injured. The 2nd number 50 would cover all people injured in any one accident. Using our example, this would be $50,000. This 2nd number would be “per occurrence”. The first 2 numbers, the 25/50 includes medical bills, pain and suffering and lost time at work.


The last number 20 tells you how much “property damage” (other guys car/property) coverage you have. So, $20,000 for property damage you caused. Again, this could be an auto, a fence, mailbox, their home, any property of someone else. These 3 numbers are coverage for the other guy, not you or your car.

What Is Not Covered Under Liability Insurance?

It’s important to note that liability insurance only covers the damages caused to the other person. It does not cover any damage done to your own vehicle or person. To avoid having to take on the repair or replacement costs for your own auto, you can add comprehensive or collision insurance to your policy. You can also add uninsured motorist to cover your body, and your passengers’ bodies, for your/their medical bills, pain and suffering and lost time at work. This coverage will kick in when/if the person that hits you and is at fault is breaking the law and does not have liability insurance, or not enough liability insurance.

Liability insurance also only covers accidental collisions. If it’s determined that you intentionally caused damages to someone else’s vehicle or personal property or person, you are more likely to be charged with a felony or misdemeanor for insurance fraud, than you are to have your insurance company cut a check for the damage.

What Happens If I’m Underinsured?

While being underinsured may save you a few dollars every month, it can end up costing you big if you are “at fault” in an accident. It’s not uncommon for a new car to cost $40,000 or more. If you hit and total an expensive vehicle, and you have 25/50/20, that $20,000 (last of the 3 numbers) to cover a $40,000 car wouldn’t be enough coverage, would it? Could you afford to pay the $20,000 you are lacking? If you are “at fault”, you are responsible!

While your insurance company may urge the claimant (the person suing you) to sign a waiver releasing you from paying beyond your policy limit, the claimant would be well within their legal right to pursue full compensation for any damages.

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Why Choose Nevada Insurance Enrollment For All Your Insurance Needs?

It’s a good idea to carry as much liability coverage as you can afford, especially if you own a home or have other assets that you would like to protect! We can help you decide what amount is best for you. Call our licensed auto insurance agents today so we can ensure you are adequately covered.

Related Articles:

Penalties That Face Uninsured Drivers in Nevada

At Fault – If You Caused an Auto Accident

Property Damage; Do You Have Enough Coverage?

What does 25/50/20 (Nevada Minimum Coverage) mean with Auto Insurance?

Read More: Auto Insurance in Las Vegas, Nevada


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DISCLAIMER: It is important to note that the information contained herein is made general for the purpose of explanation.  You should consult your policy for exclusions or other language that may alter your policy.

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