What you need to know about auto insurance
Nearly every state in the U.S. requires that you have some level of automobile insurance, not only to protect yourself but to protect other drivers as well.
What is it?
Auto insurance is a type of property and casualty insurance that protects you, your car, other drivers and other property in the event of a car accident or other event that causes damage or injuries.
Who is it for?
Insurance for automobiles is for anyone who drives. Even though your automobile insurance policy might say it is for a certain vehicle, some aspects of the policy actually follow the driver. If you are driving someone else's car, it's likely to be your insurance that covers damages in an accident rather than the car owner's insurance.
How does it work?
Automobile insurance works very similarly to other types of property and casualty insurance. If you are in an accident or have damage due to some other covered event, such as a storm, you have to contact your insurance company to submit a claim. An adjuster will evaluate the damage and decide if it's covered. If it is, the insurance company will either tell you to get estimates on getting the car fixed or, if it decides your car is a total loss, it will issue you a check for the value. If the damage done was to another person's property, your insurer will work with that person and/or his or her insurer to pay for the damage.
Types of coverage
Almost every driver is required to carry liability coverage which pays for damage done to other people's property in an accident that is the driver's fault. Other common types of car insurance are collision, which protects your car from damage done in a crash; comprehensive, which covers damage that's not from a crash, such as hail damage or theft; and personal injury protection, which pays medical bills from a crash that exceed what the car insurance policy will pay.
The major benefits of auto insurance include following the law and having financial protection against loss that's caused by a crash.