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Car insurance is required by state law, unlike homeowners insurance. There are four main types of car insurance: comprehensive, collision, and liability. Full coverage is a combination of the three.
The minimum coverage requirements for liability insurance vary by state, but if you finance or lease your car, your lender probably requires comprehensive and collision coverage.
What is liability car insurance?
If you’re involved in an accident, liability insurance covers damage you cause to the other vehicle, driver, and its passengers. Liability coverage is required by law — except in New Hampshire.
The two main components of liability insurance are bodily injury and property damage, which most states require.
Liability insurance also includes uninsured motorist and underinsured motorist coverage, to protect you when an at-fault driver hits you and they have no coverage, or not enough coverage. (Some states also require uninsured and underinsured motorist coverage.)
Types of liability insurance
Bodily injury (BI)
Injury you cause to others, includes medical expenses, lost wages, and funeral expenses
Property damage (PD)
Source:: Business Insider