Auto insurance (also known as vehicle / car / motor insurance ) is insurance purchased for cars, trucks, and other road vehicles. Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy.

Its primary objective is to provide protection against physical damage resulting from traffic collisions and against liability that could also arise there-from.


Who is covered by my auto insurance—and under what circumstances?
Your auto policy will cover you and other family members on your policy, whether driving your car or someone else’s car (with their permission). Your policy also provides coverage if someone who is not on your policy is driving your car with your consent.

Your personal auto policy only covers personal driving, whether you’re commuting to work, running errands or taking a trip. It will not provide coverage if you use your car for commercial purposes—for instance, if you deliver pizzas.

Personal auto insurance will also not provide coverage if you use your car to provide transportation to others through a ride-sharing service such as Uber or Lyft. Some auto insurers, however, are now offering supplemental insurance products (at additional cost) that extend coverage for vehicle owners providing ride-sharing services.



How much insurance do you need for yourself?

You probably don’t need to spend a lot of money on a Personal Injury Protection policy. You should be covered if you have health insurance and disability insurance through your employer. Just buy the required minimum.

You do need to make sure you have adequate coverage against uninsured and under-insured drivers. It’s relatively inexpensive in most states (something like $40 a year for $100,000 worth of coverage) and if you are in a collision with an uninsured driver, will help cover costs your health insurance won’t. If you’ve decided to carry BIL for $100,000/$300,000, do the same for yourself.

Collision and comprehensive coverage is worth having if you would want to repair or replace your car after an accident. These policies have a deductible (the amount you have to pay out-of-pocket before coverage kicks in), and they pay out based on the current value of your car, not what you paid for it.

Choose the highest deductible you can afford, because a higher deductible will significantly lower your premium. You’re seeking coverage for major damages to your car, not for every little thing that can go wrong. It’s better to spend $500 of your own money on minor repairs every so often than pay an extra $50 a month whether you need repairs or not. Save collision insurance for when you have car repairs that cost thousands, not hundreds. Remember, if you submit a claim for every little thing, your premium will increase.


What other types of auto insurance coverage are typical?
While most basic, legally mandated auto insurance covers the damage your car causes, it does notcover damage to your own car. To cover your own car, you should consider these optional coverages:

Collision reimburses you for damage to your car that occurs as a result of a collision with another vehicle or other object—e.g., a tree or guardrail—when you’re at fault. While collision coverage will not reimburse you for mechanical failure or normal wear-and-tear on your car, it will cover damage from potholes or from rolling your car.
Comprehensive provides coverage against theft and damage caused by an incident other than a collision, such as fire, flood, vandalism, hail, falling rocks or trees and other hazards—even getting hit by an asteroid!
Glass Coverage provides coverage from windshield damage, which is common. Some auto policies include no-deductible glass coverage, which also includes side windows, rear windows and glass sunroofs. Or you can buy supplemental glass coverage.
What is gap insurance and do I need it?
Collision and comprehensive only cover the market value of your car, not what you paid for it—and new cars depreciate quickly. If your car is totaled or stolen, there may be a “gap” between what you owe on the vehicle and your insurance coverage. To cover this, you may want to look into purchasing gap insurance to pay the difference. Note that for leased vehicles, gap coverage is usually rolled into your lease payments.

 you would have to use your own money to get your car fixed.
ALSO READ HEALTH INSURANCE PLANS

TO HELP PROTECT YOUR PASSENGERS
Medical payments coverage and personal injury protection may help pay for your medical bills if you're injured in an accident. And it also may help cover your passengers' expenses due to the accident. Coverage may help pay for hospital visits, doctor bills and surgery.

TO HELP PROTECT YOURSELF
Even though liability coverage is a legal requirement, many people drive without it. Uninsured motorist coverage may help pay for your medical bills if you're hit by a driver without insurance. This coverage is required in some states and optional in others.

Having the proper car insurance coverage in place can go beyond fulfilling a legal requirement. A car insurance policy may help protect your vehicle, your wallet and even offer peace of mind. Talk to a local agent, who can help you choose the coverage that's right for your needs.

How to pay your car insurance premiums
Depending on the insurer, you may have many options to pay your premiums, such as:

Automatic charge to your credit or debit card
One-time charge to your credit or debit card
Bank account withdrawal, which may result in a small discount
At your insurer’s local offices
By mailing a check
You may be able to pay on the insurer’s website, through the insurer’s app, or even over the phone.

Most insurers require you to pay for your entire policy period upfront, and usually charge a fee for the ability to pay month by month. (Others may frame this as a paid-in-full discount.)

Since you’re only submitting your information at the beginning of the policy period, your premiums will be the same on a per-month basis whether you pay for a six-month policy period or a 12-month period. For that reason, it’s sometimes beneficial to pay for the 12-month policy period to lock in your rates for an additional six months.