Automobile Insurance

• Automobile insurance protects drivers from the financial burden resulting from accidents, vandalism or theft. Automobile insurers offer several types of coverage that meet the needs of any driver. Liability coverage refers to the most basic type of insurance coverage. Liability coverage only pays for damage caused by the driver. Liability coverage falls into two categories, normally purchased together. Property damage liability pays for damage caused to physical property, such as another vehicle. Bodily injury liability pays for injuries caused to other people as the result of the driver's actions. Other types of insurance include comprehensive coverage, which compensates the driver for the loss or damage caused to his vehicle as the result of fire, theft, vandalism or natural disasters; and collision coverage, which pays to repair or replace the vehicle if it incurs damage as the result of an accident with another vehicle.
  
  

When To Purchase Property Damage Liability

• Property damage liability coverage prevents the property owner from suing the driver for any damage caused to the victim's physical property by the driver's actions. The financial cost of repairing or replacing the victim's property can easily exceed most drivers' financial resources, especially for newer vehicles. Drivers with excessive financial resources might choose to rely on their own finances if they cause an accident. However, if the driver lacks access to a large financial account, she should invest in property damage liability insurance to alleviate any potential financial burden.
  
  

Limitations Of Property Damage Liability

• Property damage liability coverage omits financial coverage for injuries caused by the driver as well as damage caused to the driver's property. Often accidents that cause property damage cause injuries to passengers also. These passengers can hold the driver financially responsible for their medical expenses. If the driver's vehicle sustains damage, the driver maintains the financial burden of repairing or replacing the vehicle. That's why it's important to also carry bodily injury liability coverage as well.
  
  

Liability Insurance Requirements

• Most states require drivers to carry some level of liability coverage. According to Insure.com, as of September 2010 Florida and New Hampshire were the only states without this requirement. Each state sets its own minimum requirements for property damage liability coverage and bodily injury liability coverage. The purpose of these laws is to protect drivers and passengers who suffer a loss as the result of another driver's actions. When a driver causes property damage or bodily injuries, the liability insurance pays up to the amount listed on the insurance policy. If the costs rise above these amounts, the victim can file a claim against the driver. For this reason, most financial experts recommend drivers carry a higher level of liability insurance coverage.