The answer to the question, “Should you buy liability coverage for auto insurance?” is a very simple one. All drivers should have this type of protection in place, whether it is a legal requirement in the state where they live or not.
In a tort state, a driver is responsible for paying for the damage that he or she caused in an at-fault accident. People who have been injured in an accident have the right to sue to get compensation for their injuries, lost wages and damage to property. Liability coverage is required in no-fault car insurance states as well; if the level of injuries and damages caused meets a certain threshold, the at-fault driver can be sued as well.
What happens if you are responsible for causing an accident and you don’t have liability coverage for auto insurance in place? Depending on the state, you may have your license and registration suspended until you can provide proof of coverage. A lapse in coverage doesn’t make you a good risk to car insurance companies and you should be prepared to pay more for your coverage if you are able to find one willing to write a policy to cover you.
The other consequence of not having liability insurance in place is that you are personally responsible for paying for the damages you caused in the accident. Unless you are independently wealthy, this could be a definite financial strain for you. Rather than having to sell off assets to pay for the damages, buying liability coverage for auto insurance is a much wiser decision.