What Does Liability Car Insurance Mean? 
Liability insurance in an auto policy refers to coverage for bodily injury or property damage . This is what happens in a collision . It is separate from the physical damage coverage which can also be in an auto policy . This coverage covers your car and the damage it sustains . Bodily Injury and property damage liability are by far the most important part of your auto policy . If someone is hurt in an accident and you are at fault , the claim is going to be enormous . It will be much more than you could possibly handle with your normal cash flow . 