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🚗 '''Auto liability insurance''' is a [[Definition:Property and casualty insurance | property and casualty]] coverage that pays for [[Definition:Bodily injury | bodily injury]] and [[Definition:Property damage | property damage]] that the insured driver causes to third parties in an automobile accident. Required by virtually every U.S. state as a condition of vehicle registration, it forms the foundational layer of both [[Definition:Personal auto insurance | personal]] and [[Definition:Commercial auto insurance | commercial auto]] policies. The coverage responds only to the insured's legal liability to others — it does not cover the insured's own injuries or vehicle damage.

⚙️ A standard auto liability policy is split into two components: bodily injury liability, which covers medical expenses, lost wages, and pain-and-suffering claims brought by injured third parties; and property damage liability, which pays to repair or replace another person's vehicle or property. [[Definition:Policy limit | Limits]] are typically expressed in a split-limit format (e.g., 100/300/100, representing $100,000 per person, $300,000 per accident for bodily injury, and $100,000 for property damage) or as a single [[Definition:Combined single limit | combined single limit]]. When a [[Definition:Claim | claim]] is filed, the [[Definition:Insurance carrier | carrier]] provides both [[Definition:Indemnity | indemnification]] and a [[Definition:Duty to defend | defense]], appointing counsel and managing litigation on behalf of the insured up to the policy limits. [[Definition:Underwriting | Underwriting]] relies on factors such as driving record, vehicle type, annual mileage, and territory to set [[Definition:Premium | premiums]].

⚖️ Because auto accidents are among the most frequent sources of [[Definition:Tort | tort]] liability in the United States, auto liability insurance underpins a massive share of the overall P&C market. State [[Definition:Financial responsibility law | financial responsibility laws]] set minimum required limits, though industry professionals widely acknowledge that statutory minimums often fall short of actual claim costs, leaving [[Definition:Underinsurance | coverage gaps]] that [[Definition:Umbrella insurance | umbrella]] or [[Definition:Excess insurance | excess]] policies must fill. The rise of [[Definition:Telematics | telematics]] and [[Definition:Usage-based insurance (UBI) | usage-based insurance]] is reshaping how carriers price and distribute auto liability coverage, while the eventual proliferation of [[Definition:Autonomous vehicle | autonomous vehicles]] promises to shift liability from individual drivers toward manufacturers and software providers.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Commercial auto insurance]]
* [[Definition:Personal auto insurance]]
* [[Definition:Bodily injury]]
* [[Definition:Combined single limit]]
* [[Definition:Umbrella insurance]]
* [[Definition:Telematics]]
{{Div col end}}

Definition:Auto liability insurance - Revision history

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