Auto Insurance
Coverage protecting drivers against financial losses from accidents, theft, and liability.
What is Auto Insurance?
Auto insurance is a contract between a vehicle owner and an insurer providing financial protection against losses from accidents, theft, weather damage, and liability claims from third parties. Standard coverage types include liability (required in most states — pays others' damages when you are at fault), collision (repairs your vehicle after an accident regardless of fault), comprehensive (non-collision damage: theft, weather, vandalism), uninsured/underinsured motorist, and personal injury protection (PIP). Premiums are based on the driver's record, age, vehicle type, location, and coverage levels. Deductibles reduce premiums in exchange for higher out-of-pocket costs per claim.
Example
A driver with a $500 comprehensive/collision deductible has their $25,000 car totaled in an at-fault accident. Their insurer pays $24,500 (value minus $500 deductible). Without collision coverage, they would receive nothing from their own insurer.
Source: NAIC — Auto Insurance