Purpose

• Liability insurance pays for damages that a driver causes to other drivers or property. Liability coverage is meant to pay for damages that are the driver's fault---if someone else crashes into you, his liability coverage will pay you for the damage caused.
  
  

Requirements

• The exact requirements for bodily injury liability and property liability coverage varies from state to state. The minimum state requirements are often far lower than the amount of damage that is likely to be caused by an accident.
  
  

Benefits

• Liability insurance protects drivers from the financial burden of having to pay for damage caused by an accident. Drivers with more assets may wish to buy more liability insurance to protect themselves against lawsuits.
  
  

Misconceptions

• Liability car insurance does not cover damage incurred to your vehicle---it only covers your liability for damage you cause. If you want to protect your car from accidents that are your fault (or from acts of god like hail or fallen trees), you need collision and comprehensive coverage.
  
  

Considerations

• Some motorists neglect to buy insurance even though it is illegal to go without it. For this reason, insurance companies sell "uninsured motorist coverage" to cover damages caused to you or your property by drivers who do not have liability coverage.