What is auto insurance?
Auto insurance protects you against financial loss if you are involved in an accident. It is a contract between you and the insurance company in which you agree to pay the premiums and the insurance company agrees to pay your losses as defined in your policy.
Auto Insurance Coverage
Auto insurance provides property, liability and medical coverage.
- Property coverage pays for damage or theft to your car.
- Liability coverage pays for your legal responsibility to others for bodily injury or property damage.
- Medical coverage pays for the cost of treating injuries, rehabilitation and at times lost wages and funeral expenses.
An auto insurance policy is comprised of six types of coverage. Most states require you to purchase some, but not all, of these coverages. If you’re financing a car, your lender may also have specific requirements. To keep premiums low, you may want to have a higher deductible and be willing to pay more for repairs. Most auto policies are six (6) months or 1 year in duration. Your insurance company will notify you when it is time to renew your policy, discuss your options, and to pay your premium.
Why do you need auto insurance?
You must protect yourself! If you’re in an accident or your car is stolen, it costs money, often a lot of money, to fix or replace it. If you or any passengers are injured in an accident, medical costs can be extremely expensive. If you or your car is responsible for damage or injury to others, you may be sued for much more than you’re worth. Not only is having insurance a prudent financial decision, many states require you to have at least some coverage.