Part of what auto insurance does is to pay for the repair or replacement of a vehicle which is damaged either as a result of your driving or from other causes not related to driving, such as theft or storm damage. Auto insurance also covers your legal liability which could arise if you injure another person or damage another person's property with your vehicle. Depending on the extent of the damage or injury caused, the potential amount for which you could become liable is far in excess of the value of your automobile, perhaps in the hundreds of thousands of dollars or more. Auto liability insurance pays the damage for which you become liable, up to the dollar amount of liability coverage that you purchased. Without auto liability insurance, all of your personal assets could be at risk.
If you are sued based on operation of your vehicle, auto insurance also pays for the cost of your defense. Defending a lawsuit in court can be very expensive, even if ultimately you are found not to be legally responsible for any damages.
