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Generally, I would think there's paperwork/procedure/approvals required whenever the insurance protects more than just you. Auto liability insurance is an exam
by adrianmonk 5y ago
Generally, I would think there's paperwork/procedure/approvals required whenever the insurance protects more than just you.
Auto liability insurance is an example because it protects other drivers. Another example might be homeowner's insurance, which (if you have a loan) protects the lender too because the house is collateral.
- throwawayboise 5y agoInsurance does not remove liability from you personally. If you cause damage with your car, you are liable for it whether you are insured or not. The insurance is a private contract between you and the insurer where you basically agree to pay them a monthly amount and they agree to cover any losses you may be liable for (up to some pre-agreed limit). But the liability is not theirs, it is yours, and if the damages exceed your coverage limit, you are responsible for the difference.