• Auto liability insurance may apply in the event of a fatal accident.car crash image by dawn from Fotolia.com
  
  Buying auto insurance is a necessary part of owning and operating a car. Auto insurance, which is available from most major insurance companies as well as many smaller local companies, protects drivers from the financial consequences of traffic accidents. There are several different types of auto insurance, each of which covers specific events and types of damage.
  
  

Coverage

• Insurance providers who offer liability insurance are legally obligated to pay for damage that the insured driver causes. This may include damage to another driver's vehicle or personal injuries caused in a crash. Liability insurance does not apply to the insured driver, vehicle or passengers. It applies solely to other parties, including property owners whose yards, fences, signs or homes sustain damage from an accident.
  
  

Requirements

• Most states require some amount of liability insurance. Drivers who fail to buy the right level of insurance, including a state-mandated limit and deductible amount, are subject to fines and possible license suspension. The purpose of such a law is to ensure that citizens aren't injured by uninsured or underinsured drivers and to provide money to have damaged vehicles removed from public roads. To enforce this law, states may require proof of insurance for all drivers who apply for a vehicle registration or license a vehicle from out of state and apply for a new vehicle title.
  
  

Limits

• Insurance providers are only legally required to pay up the the maximum amount listed in a driver's policy agreement, even if the cost of the accident is higher. To ensure adequate coverage, drivers must purchase enough liability insurance. Insurance providers generally split liability insurance into two different components: liability for bodily injury and liability for property damage. Each type of liability insurance can have its own limit or the entire policy can have a per accident limit or per person limit, which will offer a higher payout if multiple drivers are injured.
  
  

No Fault

• Some states have a so-called no-fault auto insurance system. This means that in the event of a bodily injury claim, each injured party receives insurance compensation from their own policies. This system prevents lawsuits that determine blame in car accidents. States with no-fault insurance, such as Florida, may not require drivers to have liability coverage.