Auto insurance is a type of policy that provides financial protection for vehicles and their owners against losses resulting from accidents, theft, and other incidents. Key components of auto insurance include:
- Liability Coverage: This is often required by law and covers damages you cause to others in an accident, including property damage and bodily injury.
- Collision Coverage: This covers damages to your own vehicle resulting from a collision with another vehicle or object.
- Comprehensive Coverage: This covers damages to your vehicle from non-collision incidents, such as theft, fire, or natural disasters.
- Personal Injury Protection (PIP): This covers medical expenses for you and your passengers regardless of who is at fault in an accident.
- Uninsured/Underinsured Motorist Coverage: This provides protection if you’re involved in an accident with a driver who either has no insurance or insufficient coverage.
- Optional Coverages: These can include roadside assistance, rental car reimbursement, and gap insurance, which covers the difference between the amount owed on a vehicle and its actual cash value in case of a total loss.
Auto insurance premiums are determined by factors such as your driving record, the type of car you drive, your age, location, and the coverage limits you choose.