Does Liability Insurance Cover the People in Your Car?

If you own an auto insurance policy, you may have liability coverage to pay for accident-related injuries. However, liability insurance may not cover injuries sustained by all parties involved in an accident. If passengers in your vehicle are injured, you may need some form of medical coverage to help pay for their treatment. Laws vary from state to state as to what type of coverage you need and how it will apply.


Virtually all states require vehicle owners to carry at least a minimum amount of liability insurance. Liability insurance is sometimes referred to as third-party insurance because it pays for bodily injury and property damage sustained by drivers and passengers in another vehicle due to your negligence. It also protects you in the event you are sued by an injured party. Liability insurance does not cover injuries to you or passengers in your own vehicle.

First-Party Coverage

To provide coverage for injuries sustained by you or passengers in your vehicle, you will need to carry some form of first-party insurance. Your state of residence will determine whether you need to carry first-party benefits and in what amounts. First-party benefits may be used to supplement existing health insurance coverage or as primary coverage if you or your passengers have no other health insurance.


Depending on your state, your method of covering injuries to passengers in your vehicle may include medical coverage or personal injury protection. Medical coverage will pay for your passengers' medical bills as well as funeral costs if the injuries result in a fatality. Personal injury protection covers medical bills and provides additional benefits such as providing reimbursement for lost wages and rehabilitative and psychiatric therapy. It may also cover the expense of hiring household help during the passenger's recovery period.


In some instances, a passenger in your vehicle may be entitled to receive benefits for injuries under his own auto policy, so your policy will then provide secondary coverage. If his own health insurance is providing primary coverage, your passenger may be able to use the medical benefits under your auto policy to cover out-of-pocket expenses like deductibles, co-insurance and co-payments. Whenever more than one insurance plan is involved, you will need to determine which coverage is primary to avoid duplication of benefits.