Why is Liability Insurance Required for my Car?

In order to license your car, you must prove your financial responsibility by providing proof of liability insurance to your state licensing department.

What are you required to carry liability insurance on your car?

It’s really quite simple. Liability insurance protects OTHER people when you drive your car. So imagine a society where no liability is required in order to drive a 5,000 pound vehicle at 75 miles an hour.  Accidents can and DO happen. And they are not always accidental.

When you are proven liable, or responsible, for injuring another party or damaging their property, that’s when your liability insurance pays to repair the damage or pay hospital bills.

If you do not have liability insurance (and this can happen if you allow your insurance policy to lapse), then if you are liable for injuring someone else with your vehicle, there is no recourse for the other party to recover damages other than suing you.

Liability insurance also protects your assests, because if you get sued and a court rules that you must reimburse for damages, then you may have no alternative than to liquidate all assets and declare bankruptcy.

Nobody should drive a vehicle without having adequate liability insurance.  You may think ‘it won’t happen to me’, but if it does happen to you, it can have devastating financial consequences that could have been prevented by paying a few dollars a month for liability coverage.