What is a liability limit?

A liability limit is a legal term used in the insurance industry to refer to the maximum amount of money an insurance company will pay out for an insurance claim. In California, the liability limit is set by state statutes and varies from one type of insurance to another. For example, in California, the liability limit for auto liability insurance is $15,000 for one person’s bodily injury or death and $30,000 for all bodily injuries and/or deaths in one accident. The liability limit for property damage is $5,000 per accident. Liability limits are determined by state law and can change from state to state, so it’s important to check with your insurer and the applicable laws in California to make sure you understand your coverage. It’s also important to remember that even if your insurance policy has a liability limit that is below the state’s legal minimum, your insurer will still have to pay out the amount of the claim up to the legal minimum. For example, if you have an auto insurance policy with a $10,000 liability limit, but the legal limit in California is $15,000, your insurer would still have to pay $15,000 in an auto accident claim.

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