What is auto insurance?

When purchasing or leasing a vehicle, safeguarding that investment is crucial. Obtaining auto insurance provides peace of mind in the event of an accident, theft, vandalism, or damage caused by natural disasters. Rather than covering expenses directly for auto-related incidents, individuals pay annual premiums to an auto insurance provider, which subsequently covers a significant portion or all of the costs related to an accident or other forms of vehicle damage.

Auto insurance is a contract between you and the insurance company that protects you against financial loss in the event of an accident or theft. In exchange for your paying a premium, the insurance company agrees to pay your losses as outlined in your policy.

Auto insurance provides coverage for: Property – such as damage to or theft of your car Liability – your legal responsibility to others for bodily injury or property damage Medical – the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses

Basic personal auto insurance is mandated by most U.S. states, and laws vary. Auto insurance coverages are priced individually (a la carte) to let you customize coverage amounts to suit your exact needs and budget.

Policies are generally issued for six-month or one-year timeframes and are renewable. The insurance company sends a notice when it’s time to renew the policy and pay your premium.

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