Auto insurance is designed to protect yourself financially. If you or anyone for whom you're responsible seriously injures another person, you can be held liable for the injured person's medical expenses, rehabilitative therapy and long-term nursing care, as well as for his or her lost earnings.
Auto insurance is also often a legal requirement.
State laws typically state that as a driver, you either must have insurance, or be able to provide evidence that you have the financial resources to pay a judgment against you if you cause injury or damage to another person. An insurance policy is the easiest way to document that you can pay damages.