What is auto insurance?
Auto insurance is insurance for cars, trucks, motorcycles, and other road vehicles. Its primary use is to provide financial protection against physical damage or bodily injury resulting from traffic collisions and against liability that could also arise from incidents in a vehicle. Auto insurance may additionally offer financial protection against theft of the vehicle, and against damage to the vehicle sustained from events other than traffic collisions, such as keying, weather or natural disasters, and damage sustained by colliding with stationary objects.
Definition of auto insurance
Auto insurance is a contract between you and an insurance company. It’s a way to protect yourself financially if you’re involved in an accident.
There are two types of auto insurance: liability and collision. Liability coverage pays for the other driver’s medical bills, car repairs and other expenses if you’re at fault in an accident. Collision coverage pays for repairs to your own car if you’re involved in an accident, regardless of who is at fault.
Most states require drivers to have some form of auto insurance, but the minimum amount of coverage varies from state to state. You can usually find affordable auto insurance by shopping around and comparing rates from different companies.
What does auto insurance cover?
Auto insurance covers damage to your vehicle in the event of an accident. It also covers you in the event that your car is stolen or vandalized. If you are found at fault in an accident, auto insurance will also cover the costs of any damages to the other party’s vehicle. In some states, auto insurance is also required to cover personal injury, medical payments, and uninsured motorists.
Auto insurance is a type of insurance that provides protection against financial loss in the event of an accident involving a vehicle. The purpose of auto insurance is to protect the policyholder from financial loss in the event of an accident. Auto insurance covers the policyholder for damages caused by the negligence of another driver, as well as damages caused by weather, fire, theft, and vandalism.
Auto insurance protects drivers from financial liability in the event of an accident. If you cause an accident, liability insurance will pay for the damages to the other driver’s car and any injuries they sustain. It will also cover your legal fees if you are sued.
There are two types of liability insurance: bodily injury and property damage. Bodily injury liability will pay for the other driver’s medical expenses if they are injured in an accident that you cause. Property damage liability will pay for the damage to the other driver’s car if you cause an accident.
Most states require drivers to have at least some minimum amount of liability insurance, but it is important to know that this type of insurance does not cover your own damages or injuries. If you want protection for yourself and your passengers, you will need to purchase additional coverage, such as collision or comprehensive insurance.
Collision and comprehensive insurance
Auto insurance is designed to protect you financially if your car is stolen or damaged in an accident. There are two types of coverage that are typically included in an auto insurance policy: collision and comprehensive.
Collision coverage pays for damage to your car if it hits, or is hit by, another vehicle or object. This type of coverage is optional, but if you have a loan or lease on your vehicle, your lender will likely require you to have it. Comprehensive coverage pays for damage to your car from events that are not collision-related, such as theft, vandalism, or weather damage. Like collision coverage, comprehensive is also optional, but may be required by your lender.
Both collision and comprehensive coverage have deductibles, which is the amount you pay out-of-pocket before your insurer pays the rest.
Uninsured and underinsured motorist coverage
If you’re in an accident and the other driver doesn’t have insurance, uninsured motorist (UM) coverage can help pay for your repairs. If the other driver does have insurance, but not enough to cover all of your damages, underinsured motorist (UIM) coverage can help pay the difference.
Both UM and UIM are optional coverages in most states, but if you finance your vehicle, your lender may require you to buy them. You might also be required to buy UM/UIM coverage if it’s offered as part of a package by your insurer.
UM/UIM coverage typically pays for repairs to your car up to the limits of your policy, minus any deductible. It also covers injuries to you and your passengers caused by an uninsured or underinsured driver, up to the limits of your policy.
Medical payments or personal injury protection
Medical payments or personal injury protection is insurance that covers medical expenses and, in some cases, lost wages and funeral costs. This type of insurance is typically required if you have a loan or lease on your vehicle.
If you’re in an accident, medical payments or personal injury protection coverage can help pay for hospitalization, doctor’s visits, surgery, X-rays and other medical treatments. It can also reimburse you for lost wages if you have to miss work because of your injuries. This type of coverage is often called “no-fault” insurance because it pays for your medical expenses regardless of who caused the accident.
In some states, personal injury protection is part of the mandatory basic auto insurance coverage. In other states, it’s optional.
Coverage for damages to your car
Auto insurance is there to protect you financially if your car is damaged in an accident. It can cover repairs to your car and any medical expenses for you or your passengers. It can also provide coverage if your car is stolen or vandalized.
There are different levels of coverage, and what you need will depend on factors like the value of your car and how much risk you are willing to take on. You will also have to pay a deductible, which is the amount you agree to pay out of pocket before your insurance company steps in.
If you have a loan on your car, your lender will require that you have full coverage insurance. This means that your insurance will pay off the remaining loan balance if your car is totaled in an accident.