What is it?
Automobile insurance is a insurance that, at a minimum pays for damages you cause while driving. Depending on the level of insurance you have, it might also pay for damage to your own car, damage to other property and medical bills for you and passengers in your car and other cars.
Who is it for?
Car insurance is for anyone who drives a car. A common misconception is that insurance covers the car. It actually covers the driver. If you are driving someone else’s car, your insurance covers you, not the insurance held by that driver. If you drive, even if you don’t own a car, you need insurance.
How does it work?
Auto insurance covers the party that is at fault in an accident, although certain types of insurance may pay for some things even if you weren’t at fault. If you are involved in an accident you must contact your insurer and start a claim. The insurer will investigate and then pay if it is obligated to, minus whatever deductible amount you are responsible for.
Different types of coverage
There are several main types of car insurance. Liability insurance is the minimum most states require. It pays for damages you cause to other drivers if you are at fault in an accident. Collision insurance pays for damages to your own car if you are at fault in an accident. Comprehensive insurance covers damages not caused by an accident with another car, such as weather damage, fire damage, vandalism and theft. Other types of coverage include uninsured motorist protection and personal injury protection.
The major benefit of car insurance is that you have financial coverage in case you cause an accident and won’t have to pay costs out of pocket. Another advantage of having insurance is that in most states you can’t register your car without it.