- Car insurance is designed to protect you against financial losses if you’re involved in an accident or the vehicle is damaged in some way.
- Most states require you to have minimum amounts of liability insurance coverage; some also require you to have other coverage types, such as uninsured motorist coverage.
- Premiums are what you pay monthly, bi-annually, or yearly to maintain a car insurance policy while deductibles are amounts you pay when you file a claim.
- It’s important to shop around for the best car insurance rates to find the right coverage for your vehicle at the right price.
What Is Car Insurance?Car insurance is effectively a contract between yourself and an insurance company in which you agree to pay premiums in exchange for protection against financial losses stemming from an accident or other damage to the vehicle1. Auto insurance can offer coverage for:
- Vehicle damages, including your car or another driver’s vehicle
- Property damage or bodily injuries caused by an accident
- Medical bills and/or funeral expenses associated with injuries sustained in an accident
- The exact details of what’s covered depend on the minimum coverage requirements for your state and any additional coverage options you choose to include. Every state except New Hampshire requires drivers to have a minimum amount of bodily injury liability coverage and property damage liability coverage