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Motor VehicleInsuranceFinancial ResponsibilityAnyone who owns or drives a car should have protection againstpersonal injury or damage to the property resulting from accidents. Youalso need protection against loss for injuries to others or damage to theproperty of others.Every state has a financial responsibility law , which requiresvehicle owners to prove they can pay for damages or injury caused byan automobile accident. You may show proof of financial responsibilityby depositing money, depositing bonds or other securities, or carryinginsurance. As of 2000, more than 40 states had laws requiring peopleto carry automobile insurance. In the remaining states, most people buyautomobile insurance by choice.Types of Motor Vehicle InsuranceThe coverage provided by automobile insurance falls into two categories:protection for bodily injury and protection for property damage(see Figure 16.5).l How to explain thepurpose of financialresponsibility lawl How to describe thetypes of automobileinsuranceKnowing about thedifferent types ofautomobile insurancecoverage will help youbuy the best policy foryour needs.Figure 16.5Bodily injuryliabilityPropertydamageliabilityAutomobile Insurance CoverageBodily Injury CoveragesMedicalpaymentscoverageProperty Damage CoveragesCollisionPROTECT YOURSELFBuying bodily injury and property damage coverage can reducethe financial impact of an accident. What type of expenseswould be paid for by bodily injury liability coverage?Uninsuredmotorist'sprotectionComprehensivephysicaldamagel financial responsibilitylawl bodily injury liabilityinsurancel medical paymentsinsurancel uninsured motoristinsurancel underinsured motoristinsurancel property damageliability insurancel collision insurancel comprehensiveinsurancel no-fault insuranceChapter 16: Owning a Vehicle 351