The ins and outs of auto insurance
If you drive a car, even if it’s just borrowed from your parents or a friend, you have to have at least a minimum amount of auto insurance to protect yourself and other drivers from the possibility of a crash. Depending on the type and amount of coverage you have, your policy might cover you for incidents outside of driving as well.
What is it?
An auto policy is a bit different from most other types of insurance policies. Whereas their main purpose is to protect you from risk, an auto policy’s main purpose is to protect other drivers against damage to their property as well as injuries caused by your driving. Depending on the type of coverage you have, your auto policy also might cover your vehicle as well.
Who is it for?
Auto coverage is for anyone who drives, even if that person does not own a car. If you drive a borrowed car, the owner’s insurance may cover the vehicle, but it won’t cover you as a driver, which is why you need your own policy.
How does it work?
Depending on the type of coverage, an auto policy can cover both another driver and vehicle as well as your own. If you are in an accident, you must contact your insurance company. Depending on the details of the crash, the insurer will determine your liability and pay out any amounts covered in your policy minus any deductibles that you owe.
Types of coverage
There are several different types of auto insurance. Liability coverage pays for damage you do to other people’s property as well as injuries you may cause. It is required by law in almost every state and has no deductible. Collision coverage covers damage to your car caused in a crash that another driver’s insurance doesn’t pay for. Comprehensive covers damage to your car that’s caused by something other than a crash, such as weather. Both of these coverages have a deductible. Other coverages include personal injury protection and uninsured motorist.
The main benefit of auto coverage is the liability protection that prevents you from being on the hook for a big bill if you cause a crash. If you have collision and comprehensive coverage, another benefit is coverage for damage to your car from just about any source.