Liability insurance covers the other car if you have an accident and you are at fault. Liability insurance is required by law in most states, so you must carry this coverage if you own and operate a motor vehicle. Each state will have a specified amount of coverage that you must purchase, so always know the laws where you reside. In many cases, this amount will range from $10,000 up to $50,000. Liability insurance is the one place where you do not want to pinch pennies, as you could easily damage a car that is worth much more than your own. Your insurance company will only pay up to the amount of coverage you purchased, leaving you potentially with a whopping bill to pay. Typically, it will only add a few extra dollars to buy more liability coverage, so play it safe and pay the cost.
Property damage can cover anything from a vehicle to exterior surfaces such as buildings, sidewalks or any personal property. This could include bicycles or city property like stop signs and utility poles. Insurance for property damage can also include items within a vehicle, such as computers or cameras.
Be aware that many people drive without automobile insurance, regardless of the fact that it is against the law. This means that you could easily be involved in an accident that is not your fault, but the other driver has no insurance. If this happens, you will have the burden of trying to force this person to pay for the damage to your vehicle. Chances will be high that they do not have the funds to pay. For this reason, it would be wise for you to purchase uninsured motorist coverage. This will cover your vehicle if you get hit by someone who does not have insurance. The cost for this coverage is minimal compared to the benefits, so be sure to include this coverage, even if the insurance company does not actively recommend it.
Understanding these basic things about vehicle insurance can make a big difference in the coverage you end up having. Be informed and then relax, knowing that you are covered.