Liability auto insurance is a requirement in some countries, states or provinces if a driver wants to use the open roads of the area. The coverage of this insurance is necessary to protect the driver of the other vehicle when an accident occurs. This coverage includes repair costs to the car, medical expenses for the driver and even mental counseling for the driver. You will find that if you want to register your car in your specific state or country, you will have to show proof of an insurance policy. The rules regarding registration and the proof requirements change from country to country and state to state. Some of these will require proof at registration, while others will only ask for proof only if an accident occurred.
There are even minimum auto insurance coverage requirements to be able to drive on roads without breaking the law. The minimum requirement is determined by the state Department of Transportation, so there will be some places where there are no-fault laws. This indicates that the liability insurance will have to pay for medical bills regardless of who was responsible for the accident. These laws were put in play to reduce the occurrence of fraud.
Various elements, like credit history, as well as driving history also influence the cost of an insurance policy. Some companies even consider the age and gender of drivers they cover: for example, a teenage male will pay more for the same policy than a teenage female. What also heavily influences the cost of auto insurance is the type of car. Most premiums that are paid out are for collision and comprehensive policies and not for liability insurance. This policy covers the driver whereas liability takes care of the other driver.
Essentially, if you want to drive on the road legally, you will have to have insurance that protects your fellow drivers. This motivates some people to drive more safely as they will never be sure how much the other driver’s policy can pay out. You will also need to buy and pay extra for insurance to protect yourself.