Tort law is that branch of the legal system that governs the circumstances under which an individual or other legally recognized entity, such as a corporation or governmental unit, may be subjected to liability and required to compensate another person for a private injury or wrong not arising out of a contractual relationship. The system of tort law, among other things, provides the legal underpinnings for that part of the business of motor vehicle insurance that deals with evaluating and paying claims by one person that result from the ownership and operation of motor vehicles by other persons.

While the owners and operators of private motor vehicles sometimes think of their possession of auto insurance as totally eliminating any potential tort liability on their parts, such owners and operators remain subject to the tort system to the extent that their insurance coverage does not encompass part or all of their legal liability for an incident that has caused personal injury or property damage to another person. Such a situation can arise, for example, where a court judgment reflecting injury or damage caused by an insured private vehicle owner or operator exceeds the limits of his or her policy, or where the insured’s failure to provide required notice to an insurer or cooperate in the defense of a legal action causes the insurer to assert that it is not required to provide coverage for the loss under the policy.

Most cases of potential tort liability of private vehicle owners and operators, though, are dealt with under the motor vehicle insurance system. Because the business of insurance in the United States, including that of motor vehicle insurance, has historically been governed by the laws of the individual states rather than by a single unified body of federal law, the answers to questions about the potential tort liability of owners and operators of private motor vehicles, and about the insurance coverage of such tort claims, will vary from state to state, and will be found in the state statutes regulating the business of insurance and in court decisions dealing with insurance law.

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