What is the primary purpose of liability insurance?

The primary purpose of liability insurance is to pay for others' costs resulting from your accident. This type of insurance is designed to protect you financially if you cause an accident that results in injuries to other people or damage to their property. It covers expenses such as medical bills for the injured parties and repair costs for damaged property, ensuring that you are held financially accountable for the impact of your actions on others.

Liability insurance does not cover your own vehicle damages, which is a key distinction as that would be handled by collision or comprehensive coverage. While it might provide some protection against personal injuries, that specifically falls under personal injury protection or medical payments coverage, rather than liability. Additionally, liability insurance does not directly contribute to the resale value of your vehicle, which is determined by other factors such as age, condition, and market demand.