In the United States, liability insurance covers claims against the policy holder (you) and generally, any other driver of the insured’s auto, provided they don't live at the same address as the policy holder and are not specifically excluded on the policy.

Liability insurance usually will not protect policy holder if they drive any vehicles other than their own. However, there is good news when you drive a vehicle owned by another party, you are covered under that party’s policy.

Non-owners policies may be offered that would cover an insured on any vehicle they drive. This coverage is available only to those who do not own their own vehicle and is sometimes required by the government for drivers who have previously been found at fault in an accident.

Generally, liability coverage does extend when you rent a car. But, you should be aware that may be the only part of your coverage that is included when renting a car.

Most rental car companies offer insurance to cover damage to the rental vehicle. These policies may be unnecessary for many customers as credit card companies, such as American Express, Visa and MasterCard, provide supplemental collision damage coverage to rental cars if the transaction is processed using one of their cards. These benefits are restrictive in terms of the types of vehicles covered.

Liability coverage provides a fixed dollar amount of coverage for damages that an insured becomes legally liable to pay due to an accident or other negligence.

For example, if an insured drives into a fence and damages the fence, liability coverage pays for the damage to the fence. In this example, the insured also may become liable for other expenses related to damaging the fence, such as loss of livestock if this fence was to keep the livestock from escaping.

Liability coverage is available either as a combined single limit policy or as a split limit policy:

A combined single limit combines property damage liability coverage and bodily injury coverage under one single combined limit. So both damage to the car and passengers and driver would be paid out under the same coverage.

A split limit liability coverage policy splits the coverage's into property damage coverage and bodily injury coverage. So liability coverage would pay for the liability and property damage would be paid out separately under the bodily injury coverage.

Collision coverage provides coverage for an insured's vehicle that is involved in an accident, subject to a deductible. You pay the deductible and then the company will pay for the repair of the vehicle from the accident. This coverage is designed to provide payments to repair the damaged vehicle, or payment of a cash value of the vehicle if it cannot be repaired.

Comprehensive coverage provides coverage, after being subject to a deductible, for an insured's vehicle that is damaged by incidents that are not accidents. Examples would be theft or attempted theft, vandalism, weather, or impacts with animals.

Uninsured/Underinsured coverage, also known as UM/UIM, provides coverage if another at-fault party either does not have insurance, or doesn't have enough insurance. In other words your insurance company acts as at fault party's insurance company.

In the United States, the definition of an uninsured / under-insured motorist, and corresponding coverage's, are set by the state you reside in.