What does liability insurance primarily cover?

Liability insurance primarily covers injury or damage to third parties, which means it protects you if you're responsible for causing harm to someone else or their property in an accident. In the context of auto insurance, this includes medical expenses for injured persons and repair costs for damaged property.

The purpose of liability insurance is to ensure that victims of accidents are compensated for their losses, rather than placing the financial burden solely on the at-fault driver. This type of coverage is often legally required, as it helps to maintain financial responsibility among drivers.

In contrast, other types of insurance cover different scenarios. For instance, injury to the policyholder would typically fall under personal injury protection or health insurance. Damage to the policyholder's vehicle is covered by collision or comprehensive insurance. Vehicle theft is covered by comprehensive insurance as well but is not related to liability insurance. Understanding these distinctions is crucial for comprehending the overall framework of auto insurance.