Automobile

What is auto insurance?

Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy. An auto insurance policy comprises six different kinds of coverage. Most states require you to buy some, but not all, of these coverages. If you're financing a car, your lender may also have requirements. Most auto policies are for six months or a year. Your insurance company should notify you by mail when it's time to renew the policy and pay your premium.

Auto insurance provides property, liability, and medical coverage:

• Property coverage pays for damage to or theft of your car. Commonly called comprehensive and collision coverage, physical damage to your vehicle applies when YOUR car is damaged in an accident, or a hail storm, you hit an animal or are stolen. Comprehensive and Collision coverage comes with a deductible you choose. To learn more about Physical Damage coverages, click here.
• Liability coverage pays for your legal responsibility to others for bodily injury or property damage. For example, if you are in an accident and the other party is hurt, the personal automobile policy is designed to pay for injuries to people in the other vehicle.
• Medical coverage pays for the cost of treating injuries, rehabilitation, and sometimes lost wages and funeral expenses.