Quick Summary:
- BI covers injury claims, PD covers damage to other people’s property.
- Split limits show per-person, per-accident, and property caps for claims.
- State minimum liability can be exhausted fast after a multi-car crash.
- Many travellers choose higher limits to protect savings and future income.
When you arrange car hire in the United Estates, liability insurance is the part that protects you if you injure someone or damage their property. It is also the area where the wording on US policies can feel unfamiliar, because limits are often shown as BI and PD with a set of numbers. Understanding those numbers helps you avoid relying on “state minimum” cover that may be legal but not financially sensible.
This guide explains what BI and PD mean, how split limits work, why minimums can be risky, and how to choose an amount that matches real-world costs. It focuses on third-party liability, not damage to the hire car itself.
If you are comparing options for car hire in the United Estates, it is worth reading the liability section as carefully as the vehicle excess. Liability claims can follow you long after the trip ends.
What BI and PD mean
BI stands for Bodily Injury. It pays for injuries you cause to other people in an accident where you are legally responsible. BI can include medical bills, ambulance costs, rehabilitation, lost wages, and legal fees. In severe cases it can also include compensation for long-term disability.
PD stands for Property Damage. It pays for damage you cause to someone else’s property. This is most commonly another vehicle, but it can also be a fence, building, shopfront, traffic light, or roadside barrier. PD may also include some related costs such as towing or loss of use for the other party’s vehicle, depending on the policy and state rules.
BI and PD do not pay to repair the car you hired. That is handled by collision damage options, waivers, or separate damage cover. Liability is about other people’s losses.
How split limits work on US car-hire liability
In many US states, liability is shown as a split limit, usually written like 25/50/25 or 100/300/50. These numbers represent three caps:
1) BI per person, the maximum the policy will pay for injuries to any single person in the accident.
2) BI per accident, the maximum total the policy will pay for injuries to everyone combined in that one accident.
3) PD per accident, the maximum total the policy will pay for property damage in that accident.
So, a 100/300/50 limit means up to 100,000 for any one injured person, up to 300,000 total BI for the accident, and up to 50,000 for property damage.
Some options are shown as a single combined amount, often called a combined single limit (CSL), such as 300,000. A CSL can be simpler because it can be used flexibly across BI and PD, although the exact availability depends on the product and location.
When you are organising a trip and comparing providers or vehicle types, you may see differences in what is included by default. Browse the general information for car rental in the United Estates and then cross-check the insurer’s wording for how limits are displayed, split or combined, and any key exclusions.
Why “state minimum” can be risky
State minimum liability is the least amount of cover required to drive legally in that state. It is not a recommendation for what you can afford to risk. Minimums vary significantly, and in some places they are low compared with modern medical costs and vehicle prices.
Here is why minimums can be exhausted quickly:
Medical costs add up fast. Even a moderate injury can lead to emergency care, imaging, specialist visits, and time off work. If multiple people are injured, the per-accident BI cap becomes the limiting factor.
Multi-car incidents are common. A single mistake in heavy traffic can involve several vehicles. The per-accident BI cap and PD cap are shared across everyone affected.
Vehicle values are higher than many people expect. Damage to newer cars, SUVs, and pickup trucks can be expensive. If you hit a high-end vehicle or cause a chain reaction, PD can exceed a low limit.
Property is not just cars. Guardrails, signage, storefronts, and utility poles can generate large repair bills and municipal charges.
You remain responsible for amounts above the limit. If the claim exceeds the policy limit, the injured party may pursue you personally. That can put savings and future income at risk.
This is the main reason travellers often choose liability limits that are well above the minimum, even for short trips. It is not about expecting to crash, it is about acknowledging the financial impact if something serious happens.
How to choose a sensible BI and PD limit
There is no one perfect number, because it depends on where you drive, how much time you spend on the road, and your personal financial situation. However, you can make a sensible choice by thinking in layers: your exposure, the likely costs, and the cost difference between limits.
Step 1: Consider where and how you will drive
Driving in dense urban areas typically raises the chance of multi-vehicle incidents and pedestrian injury exposure. Longer distances and motorways increase speed-related severity. If your itinerary includes busy cities, major interstates, or unfamiliar conditions, higher limits are generally more prudent.
Likewise, if you are hiring a larger vehicle for group travel or luggage, your stopping distances may be longer and minor incidents can cause more damage. Information pages like van rental in the United Estates can help you compare vehicle categories, but the key point is that larger vehicles often increase PD exposure simply because impacts can be more forceful.
Step 2: Think about realistic claim sizes
A practical way to decide is to sanity-check what each cap could cover.
BI per person: Ask whether the per-person cap would cover a serious injury scenario, such as surgery and extended rehab. Low per-person caps can be problematic even if the per-accident total sounds acceptable.
BI per accident: Consider the possibility of two or three injured occupants in another vehicle. The total BI cap is shared, so an accident with multiple injured people can breach it quickly.
PD: Consider that PD might need to cover multiple vehicles, plus infrastructure. A PD cap that looks high in isolation may still be low if a crash involves more than one newer vehicle.
For many travellers, a common “sensible” band is often around 100/300/100 or 250/500/100, or a CSL of 300,000 or more. Your best fit depends on the options offered and your risk tolerance, but the underlying logic is to avoid the lowest PD caps and to ensure the BI per accident total is meaningful in a multi-person scenario.
Step 3: Compare the incremental cost, not just the headline
The price difference between minimum liability and higher liability is sometimes modest compared with the potential downside. When you review car hire pricing, look at what you gain by moving from one tier to the next, especially on PD. If higher limits cost only a small amount more per day, that can be a rational trade-off.
If you are comparing suppliers, you may notice different default liability structures. For instance, you might be looking at Hertz car hire in the United Estates versus another brand. Do not assume the same default liability limits apply across all companies or states, confirm the numbers on your specific quote and rental agreement.
Step 4: Check what is actually included with your rental
Liability can come from several sources: the rental company’s included liability (where applicable), a separate liability policy offered at checkout, or your own insurance arrangements. The important part is to confirm:
Who provides the liability cover and whether it is primary or secondary.
The exact BI/PD limits and whether they are split or combined.
Any exclusions, such as prohibited roads, unauthorised drivers, or driving under the influence.
Territory and state applicability, especially if you will cross state lines.
Also note that some products marketed around “full coverage” focus heavily on damage to the hire car, but do not necessarily include generous third-party liability. Treat liability as its own decision, not an automatic add-on.
How BI and PD interact with lawsuits and legal defence
Liability insurance typically covers legal defence costs as well as damages, but the rules vary by policy. In some cases, legal fees are paid in addition to the liability limit. In others, they may erode the available limit. This detail can matter in a severe incident, because legal costs can be substantial.
If the policy limit is exhausted, the insurer’s obligation to settle may be limited. That is another reason why higher limits can reduce personal exposure.
Common misunderstandings to avoid
“The rental company will cover everything.” Rental companies provide certain protections and options, but liability limits can still be low if you rely on the minimum required by law. Always confirm the actual BI/PD numbers.
“My credit card covers liability.” Many cards provide collision damage protection for the hire car, not third-party liability. Treat liability as separate unless you have explicit documentation that states otherwise.
“PD is less important than BI.” BI can be the larger exposure in severe injuries, but PD can still be significant, particularly with multiple vehicles or infrastructure damage. A balanced limit helps.
“If I drive carefully, minimums are fine.” Careful driving reduces risk, but it cannot eliminate it. Other drivers’ actions, poor weather, and unfamiliar roads still create exposure.
Choosing limits for different trip types
City-focused trips: Consider higher BI per accident and PD, because low-speed collisions can still involve many vehicles and expensive repairs.
Road trips with long distances: Higher limits can be sensible due to higher-speed impacts and time spent on the road.
Family or group travel: If you will be carrying passengers often, higher limits can provide additional peace of mind for scenarios involving other vehicles’ occupants.
Business travel: If you cannot afford time-consuming legal disputes or financial uncertainty, higher limits can reduce exposure. If you are selecting between providers, comparing Budget car hire in the United Estates and other options is still worthwhile, but keep the liability limits front and centre.
A simple rule of thumb
If you are unsure, avoid relying on state minimum liability for car hire in the United Estates. Choose the highest liability limit that is reasonably priced for your trip, prioritising meaningful BI per accident and a PD cap that can handle more than a single minor bump. If you already carry a strong personal auto policy at home that extends to US rentals, align your hire arrangements so you are not accidentally dropping to a lower limit while travelling.
FAQ
What does 25/50/25 mean on US car-hire liability? It means 25,000 BI per person, 50,000 BI per accident total, and 25,000 PD per accident. Amounts above those caps may become your responsibility.
Is “state minimum” liability enough for car hire? It is enough to meet legal requirements, but it can be financially risky. Medical and repair costs can exceed minimums quickly, especially in multi-vehicle incidents.
What is better, split limits or a combined single limit? Either can be suitable. Split limits cap BI per person, BI per accident, and PD separately, while a combined single limit can be used across BI and PD, depending on the claim.
Does BI or PD cover damage to the rental car I am driving? No. BI and PD cover injuries to others and damage to others’ property. Damage to the hired car is handled by separate collision or damage protection options.
How can I confirm my BI and PD limits before I travel? Check the quote and rental terms for the exact numbers and whether they are split or combined. If anything is unclear, request the insurer or rental provider’s liability wording for your state.
