Driving a car in the United States is a privilege. It's one of the greatest experiences you can have in the States. A person who drives a car has the freedom to go wherever he or she wants, for the most part. However, driving a car comes with responsibilities. One of the primary responsibilities is that a driver must have auto insurance. Car insurance, like most other insurances, is designed to protect the buyer, in this case, the car owner from suffering great expenses in an emergency situations. No matter how good a driver you may be, there are many other drivers on the road, and many of them may not be as good a driver as you are. It is important to recognize this since you are sharing the road with them.
There are two basic types of car insurance, liability and collision. The state of California requires that all drivers carry liability insurance. Collision insurance is optional unless the driver has borrowed money to buy the car from a financial institution. In that case, the bank, or credit union, will require the driver to purchase collision insurance.
Liability insurance is a part of the general insurance system of risk financing to protect the insured person from the risks of liabilities from lawsuits and similar claims. It protects the policy holder in the event he or she is sued for claims that come within the coverage of the insurance policy. For the most part, liability insurance will cover a person from financial damages caused by the insured. So if you cause an accident, liability insurance will protect you. It will cover property damage, and bodily harm damage up to the amount of insurance purchased, so think carefully about any financial caps you set on your insurance. The best thing to do, as always, is to shop around.