Liability is a fancy word to state who is at fault, particularly when it comes to the law. With insurance, liability is a coverage which applies for both property insurance and also auto insurance.
Home Insurance Liability
Liability insurance protection under your home usually starts with a minimum of $100,000 per claim. While that sounds like a large amount of money, if someone has to seek medical attention for injuries occurring on your property and you are negligent/at-fault for their injuries, that $100,000 may seem more like $100! Especially if their injuries are severe.
Liability also provides legal expenses coverage for the home owner.
Other limits may be required if considering bundling auto, home, and purchasing additional liability protection in the form of a personal umbrella policy. With umbrella policies, the limits of liability would need to be at least $300,000 to $500,000 on the home policy, vs the standard $100,000.
Auto Insurance Liability
Liability insurance protection is required for autos with almost every state within America. New Hampshire is the only state; while they do not require auto liability insurance, documentation is required to prove you have enough money available in case you are at-fault in a car accident.
Each state (with the exception of NH) determines the minimum amount of liability insurance an auto owner must carry to be "legal." Not all states require the same limits or the same coverage. For example, while Ohio requires liability limits of 25/50/25 --- South Carolina requires liability limits of 25/50/25 + Underinsured Motorists Bodily Injury 25/50 + Underinsured Motorists Property Damage $25,000.
Let's break down the what looks like a math problem gone awry:
(In this scenario, both Car A and Car B driver are owners of their cars.) 
- 25/50/25 = $25,000 Injuries per person/$50,000 total injuries per accident/$25,000 property damage.
- If two people are sitting in Car A at a red traffic light, and Car B with 3 people comes up behind them and does not stop in time, and rear-ends them.
- Car B driver is responsible for injuries to Car A's two people PLUS Car B's passengers. Plus Car A's rear-end damage.
- If Car A is not drivable, Car B driver's insurance is responsible for Car A's driver to get a rental car while it is being repaired.
Car B's car insurance has 25/50/25
They have up to $25,000 per person injured, up to no more than total $50,000 per accident for injuries (2 people in Car A, 2 passengers in Car B).
- If an ambulance takes each person to the hospital, it could be $3000 per person= $12,000.
- This does not factor in ER visit per person, any diagnostic testing (X-rays), medications, specialists, surgeries, rehab, lost wages.
Limits Matter
While minimum liability limits are tempting when trying to keep your insurance price low, it could be vastly costlier in the long run!
Consider talking with a licensed insurance agent to weigh out your options on what works best for your budget -- or reach out to Consultative Insurance Group!