Auto insurance is required by law in most U.S. states because it helps cover the costs of damages in the event of an accident. The minimum required coverage usually includes liability insurance, which pays for damages to other vehicles or property when you are at fault in an accident.

In addition to liability insurance, many drivers choose to add coverage for their own vehicle through collision or comprehensive insurance. Failing to carry at least the minimum required auto insurance can result in fines, license suspension, and increased financial liability in case of an accident.