What is the purpose of liability coverage in an auto insurance policy?

Liability coverage in an auto insurance policy serves the primary function of protecting the insured from financial loss due to damages they cause to third parties while operating their vehicle. This includes payment for bodily injury and property damage that might occur in an accident where the insured is at fault. It ensures that if the insured injures another person or damages someone else’s property while driving, their insurance will help cover the costs associated with these claims, up to the limits of the policy.

This aspect of liability coverage is essential because it fulfills legal obligations that require drivers to be financially responsible for harm they may cause to others. Without adequate liability coverage, a driver could face significant out-of-pocket expenses, which could lead to financial hardship or even legal actions. It essentially provides peace of mind and financial security for both the insured and the victims of an accident.