Liability coverage can help protect you and your finances in case of an accident by helping to pay for medical bills, lost income, legal fees and more.
Article: 5 minutes
Updated: February 8, 2026 Published: June 25, 2019
By: Brookie Lutz, CFP® Reviewed by: Editorial contributors
While your bank account may not have seven figures, you don't have to be a millionaire to face a lawsuit like one.
Say you're in a traffic accident and responsible for damaging multiple cars and injuring several people. If their medical bills and vehicle damages exceed your policy's limits, could you afford to pay the difference? You may have to sell assets, use savings or even have your paychecks garnished to pay what you owe.
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You don't have to be a millionaire to be sued like one. And while you may not be a millionaire, your liability insurance needs could add up to more than you might expect. At USAA we understand your coverage needs can change over time, which is why we recommend you review them at least annually.
Auto liability coverage helps protect you financially if you're at fault in an accident.
Say you're in a traffic accident and responsible for damaging multiple cars and injuring several people. If their medical bills and vehicle damages exceed the limits on your policy, could you afford to pay the difference?
You may have to sell assets, dip into your savings, or even have your paychecks garnished, until you have paid what you owe. When selecting liability limits, consider your net worth as your starting point. It can be calculated by taking your total assets and subtract them by your total liabilities. Total assets are things such as the market value of owned property, retirement savings, personal items like jewelry or a vehicle and your savings and investments. Total liabilities are things such as credit card debt, bank loans or student loans.
Securing protection for the future is just one of the many ways USAA is here to help you become financially prepared. When it comes to liability coverage, it costs only pennies on the dollar compared to the protection it provides. Click the link to review your current liability limits and make the necessary updates to ensure you are protected.
Description of visual information[The information contained is provided for informational purposes only and is not intended to represent any endorsement, expressed or implied, by USAA or any affiliates.
USAA means United Services Automobile Association and its affiliates.
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This coverage helps pay for medical bills, lost income, and pain and suffering if you're at fault in a car accident. It can also help pay your legal fees if the other party files a lawsuit against you. Most states legally require you to carry a specified amount of liability insurance on your auto insurance policy.
Bodily injury: This helps pay for the other party's medical bills and lost income. It can also help pay your legal fees.
Property damage: This helps pay for damage to the other party's property, such as a vehicle, house, fence or guardrail.
The general rule of thumb is to carry enough liability insurance to cover your net worth. When you select liability limits on your policy, consider your net worth as a starting point. To calculate your net worth, add the value of your assets and subtract your liabilities.
Every person's situation is unique. Your risk factors might include youthful drivers on your policy, how many miles you drive and where. A high-paying occupation or owning several rental properties could also be risk factors because they increase your net worth.
Your coverage needs can change over time. We recommend you review your policy at least once every year. Depending on the state you live in and location of your property, some assets may be protected from creditors, even if you have a legal judgment against you. This protection may reduce your liability coverage need. As you're reviewing your auto liability coverage, it's also a great time to review the limits on your other policies. Make sure your other coverage is appropriate and complements the changes you make on your auto policy.
Compared to the protection it provides, it costs pennies on the dollar to carry liability coverage. You can also save money on your policies when you bundle home and auto insurance. Securing protection for the future is one of the many ways we're here to help you prepare your finances.
In many cases filing a liability claim online is easy and convenient through our Claims Center. If you have questions, visit our auto insurance FAQ page.
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