What’s the Difference Between Bodily Injury and Property Damage Liability?
Learn how these two types of coverage protect others in an accident and shield you from financial exposure
Auto liability insurance in Canada is divided into two key parts: bodily injury liability and property damage liability. Both are mandatory components of a basic car insurance policy, and together, they form the core of how your insurance protects others if you cause an accident.
Understanding the difference between them helps you make sense of your coverage, set appropriate limits, and prepare for situations that could otherwise result in major out-of-pocket costs.
How They Work
| Liability Type | What It Covers | Who It Protects |
|---|---|---|
| Bodily Injury Liability | Medical expenses, lost income, legal fees, pain and suffering for injured people | Passengers, other drivers, pedestrians |
| Property Damage Liability | Repairs or replacement for another person's vehicle or damaged property | Other vehicle owners or property owners |
Both types of coverage activate when you are legally responsible for a collision or accident involving others. Neither applies to your own medical bills or car damage.
Why Bodily Injury Liability Matters
This portion of your policy handles the most serious and expensive outcomes of a crash — physical injuries. If you hurt another driver, pedestrian, or cyclist, your bodily injury liability covers:
-
Emergency room or hospital costs
-
Lost wages due to time off work
-
Long-term care or rehabilitation
-
Legal defense and settlements if you are sued
These costs can escalate quickly, especially if the injured person cannot return to work or files a personal injury lawsuit.
Tip: Many experts recommend carrying at least $1 million in bodily injury liability coverage, even if your province mandates a lower minimum. This helps protect your personal assets if a claim exceeds your basic coverage.
Why Property Damage Liability Matters
Accidents often involve more than just people. Property damage liability pays to repair or replace the things you accidentally harm with your vehicle. This includes:
-
Other vehicles involved in a crash
-
Fences, mailboxes, garages, or signs you strike
-
Bicycles or parked vehicles
-
Public infrastructure such as traffic lights or guardrails
Even a minor accident with a luxury car or commercial truck can lead to repair bills in the tens of thousands of dollars.
Note: Most property damage claims are smaller than bodily injury claims — but they can still be financially painful if your coverage limit is too low.
Do Not Assume “Liability” Covers You
Neither bodily injury nor property damage liability pays for your own injuries or vehicle repairs. If you want to protect yourself physically or financially after an accident, you will need additional coverage like accident benefits, collision insurance, or comprehensive insurance.
Choosing the Right Limits
When setting your liability limits, consider your total financial picture. Higher limits provide greater protection against lawsuits and large claims. If you own a home, have savings, or are working toward financial independence, carrying only the provincial minimum could leave you exposed in a worst-case scenario.
Many drivers opt for:
-
$1 million in bodily injury liability
-
$1 million in property damage liability (or a combined single limit of $2 million)
A Foundation of Protection for Others — and Yourself
Bodily injury and property damage liability are not just boxes to check — they are essential tools for protecting others from harm and protecting you from the financial fallout of a serious accident. Understanding what each one covers ensures you can drive with confidence, knowing that your coverage is built to respond when it matters most.