On a car insurance policy, liability BI/PD stands for bodily injury and property damage liability: the coverage that pays other people when you cause an accident. BI pays for injuries you cause to other drivers, passengers, pedestrians, and cyclists. PD pays for damage you cause to their cars and other property. The dollar caps on this coverage are the single most consequential numbers on your policy, because anything above them comes out of your own pocket.
Reading the Three Numbers on Your Policy
BI/PD limits appear as three numbers separated by slashes, like 100/300/100. Each number is in thousands of dollars, and each is a separate cap:
- The first number is the most your insurer will pay for bodily injuries to any one person hurt in the accident.
- The second is the most your insurer will pay for all bodily injuries combined in that same accident.
- The third is the most your insurer will pay for all property damage from the accident.
The per-person cap is where people get caught. Say you carry 50/100/50 and cause a crash that injures two people. One person runs up $70,000 in medical bills and lost income. Your insurer pays $50,000 for that person because of the per-person cap, even though the $100,000 per-accident cap has plenty of room left. You owe the remaining $20,000 personally.
The per-accident cap works as a separate ceiling. On that same 50/100/50 policy, if three people are each injured to the tune of $50,000, each individual claim fits inside the per-person cap, but the $150,000 total exceeds the $100,000 per-accident cap. Your insurer pays $100,000. You owe $50,000.
What Bodily Injury Liability Pays For
BI pays for harm you cause to other people when you’re at fault. That includes their medical and rehabilitation bills, lost income while they recover, and compensation for pain and suffering. If the injured person sues and wins, the damages a court awards come from this coverage.
Coverage applies to people in other vehicles, pedestrians, cyclists, and in most policies, passengers in your own car who aren’t members of your household. That household-member exclusion catches a lot of people off guard. Many standard policies won’t pay BI claims filed by your spouse or by family members who live with you, on the theory that related claimants have an incentive to inflate damages. Some states have banned the exclusion, but it remains common enough that it’s worth checking your policy language if you regularly drive with family.
One benefit most policyholders don’t realize they have: your insurer assigns and pays for a defense attorney if a claim goes to court. On standard personal auto policies, those legal costs are typically paid on top of your liability limits, so attorney fees and court costs don’t eat into the money available to settle the claim itself.
What Property Damage Liability Pays For
PD pays to repair or replace other people’s property that you damage in an accident. The obvious example is the other driver’s car, but coverage extends to anything you hit: fences, guardrails, utility poles, mailboxes, storefronts, landscaping. Sideswipe a parked car and knock it into a brick wall, and both repairs come out of this limit.
Unlike BI, property damage has just one cap. One car or five, it doesn’t matter. Your insurer pays up to the third number for all property damage from a single accident, combined. That single cap becomes a real problem in chain-reaction crashes or when you hit an expensive vehicle. Totaling a new luxury SUV can blow past a $25,000 PD limit before you even account for the guardrail.
Split Limits vs. Combined Single Limit
Most policies use the three-number split-limit format, but some insurers offer a combined single limit (CSL) instead. A CSL replaces the three caps with one total that covers both BI and PD from a single accident. A $300,000 CSL will pay up to $300,000 total, however the claims fall.
The advantage shows up in lopsided accidents. If one person has $200,000 in medical bills and property damage is only $10,000, a CSL can put the full amount where it’s needed. A split-limit policy with a $100,000 per-person BI cap would leave you $100,000 short on that same claim. CSL policies generally cost more than split-limit policies with similar total coverage.
State Minimums Are a Floor, Not Protection
Nearly every state requires drivers to carry a minimum amount of liability coverage, and the required amounts vary widely. As of 2025, the lowest minimums still on the books are 15/30/5, the highest reach 50/100/50, and the most common minimum across states is 25/50/25. Several states raised their minimums in 2025, with at least one more increase taking effect in 2026.1NAIC. Compulsory Motor Vehicle Insurance
Even after those increases, the highest state minimum in the country won’t fully cover a single serious injury. A few days in an ICU can generate six-figure medical bills, and that’s before lost wages and a pain-and-suffering claim enter the picture. State minimums exist to get you legally on the road. They do almost nothing to protect you financially in a serious crash.
Choosing Limits That Match Your Assets
Most insurance professionals suggest carrying at least 100/300/100 as a starting point. If you own a home, have retirement savings, or earn a solid income, 250/500/100 or higher makes more sense, because those are exactly the assets a plaintiff’s attorney will target when policy limits don’t cover the full claim.
A workable rule of thumb: your liability limits should at least equal your net worth. If your home equity, savings, and investments add up to $400,000, carrying $50,000 in BI coverage per person leaves $350,000 of your assets exposed in a single bad crash.
The upgrade is cheaper than most people expect. Moving from a state minimum to 100/300/100 often costs roughly $10 to $15 more per month, because insurers price the risk of a catastrophic claim as relatively low.
What Happens When Damages Exceed Your Limits
Your insurer’s obligation ends at the policy limits. Once the BI or PD cap is exhausted, the injured party can come after you personally for the rest. This is a routine part of personal injury litigation. An attorney representing someone with $300,000 in medical bills won’t stop at your $50,000 policy limit and walk away.
If the injured person wins a civil judgment, they have several tools to collect. Wage garnishment takes a portion of each paycheck until the debt is paid. A lien on real estate means the debt gets paid when you sell or refinance. Bank accounts can be levied. In some cases, a court can order property sold at auction. Collection methods and asset protections vary by state, but the core risk is the same everywhere: insufficient liability coverage turns a car accident into a personal financial disaster that can follow you for years.
Bankruptcy offers some protection through homestead and personal property exemptions, but those exemptions have dollar caps and vary by state. None of them make you completely untouchable.
Umbrella Policies for Catastrophic Claims
An umbrella policy sits on top of your auto and homeowners liability coverage and kicks in after those underlying limits are exhausted. A $1 million umbrella typically costs around $200 per year, which makes it one of the cheapest forms of high-value protection available.
To qualify, your insurer will usually require you to first carry auto liability limits of at least $250,000 to $300,000 per person for BI and $100,000 for PD. The umbrella then provides an additional layer, often in $1 million increments, above those underlying limits. For anyone with meaningful assets to protect, an umbrella paired with solid underlying auto limits is the most cost-effective way to guard against a life-altering lawsuit.
When BI/PD Won’t Apply at All
Liability coverage has exclusions that void protection entirely in certain situations. The most common ones worth knowing:
- Intentional acts. If you deliberately use your vehicle to cause harm, your liability coverage won’t pay. Insurers exclude injury or damage you expected or intended to cause.
- Racing. Participating in any organized racing event, speed contest, or practice session at a racetrack typically voids coverage. Many policies exclude damage at any location designed for competition, which can extend to high-performance driving schools.
- Household members. Many policies exclude BI claims from family members living in your household. If this matters to your situation, look for a policy without the exclusion, or check whether your state prohibits it.
- Vehicles not on the policy. Liability coverage generally applies only to vehicles listed on the policy or, in some cases, temporary replacements and borrowed cars. Operating a commercial vehicle or a car you own but never disclosed can leave you uncovered.
When an exclusion applies, you have no coverage at all for that incident. Your insurer won’t pay the claim, won’t assign a defense attorney, and won’t negotiate a settlement. You face the full financial exposure personally, which makes these exclusions worth understanding before you need them.