What does liability car insurance actually cover?

Liability car insurance covers damages you cause to other people and their property when you're at fault in an accident. It does not cover your own vehicle or your own injuries. It has two components: bodily injury liability, which pays for medical bills, lost wages, and legal fees if you injure someone else, and property damage liability, which pays to repair or replace another person's vehicle or property you damaged. Most states require a minimum amount of liability coverage to legally drive. If a lawsuit results from an accident you caused, liability insurance also helps cover your legal defense costs. It will not pay out beyond your policy limits, meaning you're personally responsible for any costs that exceed your coverage amount.