If you drive a car, whether you own it or not, you need to carry automobile insurance. Auto policies cover the driver, not the car.
What is it?
Auto insurance is a type of property and casualty insurance that, depending on what level of coverage you have, will pay for damage you cause to other people’s property and in some cases damage caused to your vehicle.
Who is it for?
Automobile insurance is for anyone who drives. It doesn’t matter whether you own your own vehicle or not. Insurance policies generally follow the driver, not the automobile.
How does it work?
How you car insurance policy works depends on what kind of coverage you have and who is at fault in an accident. You always should report any accident you are involved in, regardless of who is at fault. If you are the party at fault, then your insurance will settle with the other driver’s insurance company to pay damages. If you have the right type of coverage, your insurer will pay for damage you incur, minus any deductible you owe. If the other driver is at fault, his or her insurance company will pay for your damages.
Types of coverage
There are many different types of auto coverage. Liability is generally the minimum level of coverage required by law. Liability is the coverage that pays for damage you cause to others in an accident. Collision is an optional coverage that pays for damage to your car caused in a collision that’s not covered by another driver’s insurance. Comprehensive covers damage to your car that’s a result of a non-collision, such as fire, vandalism or weather damage. It also covers theft. Other coverages include uninsured driver and personal injury protection.
The major benefit of having auto insurance is that you are protected against liability if you cause an accident. Additional benefits, assuming you have higher levels of coverage, include coverage for your car if it is damaged and another driver’s insurance won’t pay for it.