What does liability insurance cover? A practical guide | PEMCO 

Liability insurance is one of the most important parts of an auto policy. It helps protect you financially if you’re responsible for injuries or property damage to someone else in a covered accident. It won’t pay for your own medical bills, your own car repairs, or damage to your own property. Knowing what it does and doesn’t cover can help you choose coverage that fits how you drive. 

In Washington and Oregon, drivers are required to carry liability coverage. If you’re responsible for a covered accident, your insurance can help pay for another person’s injuries or property damage, up to your policy limits. A local PEMCO agent can walk through your options and help you build coverage that fits your situation. 

What liability insurance covers 

Liability coverage has two main parts. Both can help when you’re legally responsible for injuries or property damage in a covered accident. 

Bodily injury liability 

Bodily injury liability coverage helps pay for damages resulting from physical harm related to the accident, including past and future medical expenses, pain and suffering, and lost wages. 

Property damage liability 

Property damage liability helps pay for the repair or actual cash value of someone else’s vehicle or property if you’re found legally responsible for the damage. That could include another driver’s car, a fence, a mailbox, or a building. For example, if you back into a parked car in a lot, this coverage can help pay for the repair. 

Auto liability insurance in Washington and Oregon 

Both Washington and Oregon require auto liability insurance, but each state sets its own minimum limits. Washington requires 25/50/10 liability coverage: $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $10,000 per accident for property damage. Oregon requires 25/50/20, with the same bodily injury limits and a $20,000 property damage minimum. 

Those numbers are the most your policy will pay for a covered claim at those limits. Medical care, vehicle repairs, and legal expenses can add up quickly, so a serious accident may cost more than the state minimum covers. 

Choosing liability limits that fit 

State minimums meet the legal requirement, but they may not be enough for every driver. Many people choose higher liability limits, especially if they own a home, have savings, or want added financial protection. A local PEMCO agent can help you compare options and choose coverage that fits your situation. 

If you’re responsible for injuries or property damage that cost more than your coverage limit, you may be asked to pay the remaining amount. Reviewing your liability limits when you quote or renew your policy is a simple way to see what fits your budget and risk. If you want added protection beyond your auto and home liability limits, an umbrella policy can provide another layer of coverage. A local PEMCO agent can help explain how it works. 

How collision coverage differs from liability 

Collision coverage and liability coverage both involve car accidents, but they protect different things. Liability coverage helps pay for another person’s injuries or property damage when you’re responsible for a covered accident. Collision coverage helps pay to repair or replace your own vehicle after an accident, whether you hit another vehicle or object, or another vehicle hits your car. If you finance or lease your vehicle, your lender may require collision and comprehensive coverage in addition to liability. 

What liability insurance does not cover 

Liability coverage has important limits. It does not cover your own medical bills, your own vehicle damage, or damage you intentionally cause. It also may not cover injuries or damage tied to business use of your vehicle. If you drive for work, rideshare, delivery, or other business purposes, talk with a local PEMCO agent about coverage options that fit how you use your car. 

What to do after an auto accident 

If you’re involved in an auto accident, first make sure everyone is safe and call 911 if anyone is injured. When it’s safe, exchange insurance and contact information, take photos of the scene and damage, and report the accident to PEMCO as soon as you can. We’ll review the claim, determine coverage, and help guide the next steps. 

Review your coverage today 

Liability limits that made sense a few years ago may not go as far today. A quick policy review can help you understand your options and feel more confident about your coverage. Talk with a local PEMCO agent to review your auto policy and choose coverage that fits how you drive. 

Frequently asked questions 

Does liability insurance cover rental cars? 

Your PEMCO auto insurance may extend to an occasional rental of a private passenger vehicle in the U.S., depending on your policy. Liability coverage can help pay for injuries or property damage you cause to others while driving the rental, but it does not cover damage to the rental vehicle itself. Contact a PEMCO agent to confirm what applies before you rent. 

How much auto liability coverage should you carry? 

The right amount depends on your vehicle, budget, assets, and comfort with risk. State minimums meet the legal requirement, but many drivers choose higher limits for added financial protection. A local PEMCO agent can help you compare options and choose limits that fit your situation. 

Does liability insurance cover your own injuries? 

No. Liability insurance helps cover injuries and property damage you cause to someone else. To help cover your own medical expenses after an auto accident, you may need personal injury protection or medical payments coverage. PIP is required in Oregon and optional in Washington. 

What happens if damage exceeds your liability limits? 

If accident costs go beyond your policy limit, you may be asked to pay the remaining balance. Choosing higher liability limits or adding an umbrella policy can help add financial protection. A PEMCO agent can help you decide what fits.