How Auto Insurance Protects You
If you have an accident, auto insurance can help protect you against financial loss. Very simply, it is a contract between you and the insurance company. You agree to pay a premium and the insurance company agrees to pay for your losses, due to an accident, as defined in your policy.
Auto insurance protects you on three fronts:
Most states require you to buy some vehicle coverage. If you're financing a car, your lender may also require that you buy car insurance.
The six primary sections of an auto insurance policy
Your auto policy may include these six areas of coverage or a combination of them. Each is priced separately.
Each state requires that you have certain types of coverage combination with minimum liability limits. Talk to your agent about the type of coverage at a premium you can afford.
Footnote: This is a brief overview of how automobile insurance works. You should read a policy thoroughly before purchasing any insurance policy.