Auto Insurance Basics

Auto insurance protects you financially in case you are in a car accident. You pay premiums, and the insurance company promises to cover expenses up to an agreed-upon amount.

Do You Need Car Insurance?

Most states require drivers to provide proof of insurance. If you are in an accident and don’t have insurance, you have to pay out of pocket for the repair of vehicles and medical costs for each person. Usually, people do not have that much money, so insurance is beneficial.

What Does Auto Insurance Cover?

There are several types of coverage. Some, like liability insurance, are mandatory, while others are optional.


Liability insurance covers if you cause bodily or property damage to someone else’s vehicle. Your policy will disburse funds to the other person.

Personal Injury Protection

Medical payments for injury caused to you or your passengers are covered. The policy will pay regardless of who is at fault.

Collision and Comprehensive

These two types of coverage pay for damage to your vehicle. Collision covers if you are in an accident, and comprehensive includes damage caused by other reasons, such as theft.

Uninsurance or Underinsured Motorists

Not everyone has enough insurance coverage. This type of insurance is if you are in an accident, and the other person’s insurance cannot cover the damage to your vehicle.

When you own a vehicle, it is vital to protect your assets. Having enough auto insurance can help.