Perhaps the most important type of auto insurance to
have is liability coverage. According to "Get a Financial
Life" (Simon & Schuster), "If you cause an accident
with your car and injure someone or damage something, auto liability
insurance will pay the injured person's medical and repair expenses.
Auto liability, which is technically known as 'bodily injury
liability' and 'property damage liability,' will protect you in case
you are held responsible for an accident."
It's not unusual for liability protection to account
for more than half of an insurance policy's cost. Without adequate
protection, you could easily lose everything you own (and possibly
even a large amount of your future earnings) if you come out on the
losing end of a major lawsuit.