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What Is Car Insurance

What Is Car Insurance and Why Do I Need It?

If you drive a car you more than likely have auto insurance. In most states it is required by law. But what is car insurance? I'm pleased you asked because I'm about to answer that question so that everyone who would like to know will grasp precisely what car insurance is and why it is necessary.

When you get a car insurance policy you have entered into a contract with the insurance company. Your end of the bargain is to make sure you pay your premiums on time and it is the insurance company's responsibility to assume financial responsibility for any financial losses due to injuries or property damage if you are involved in a collision, up to the sum stated in your policy.

The lowest amount of coverage you are allowed to have includes only liability coverage. If you are at fault in a collision liability coverage will cover damage caused to the other person's car and will cover their medical expenses but will not pay for damages to your vehicle. If you want your property and possible medical bills to be covered regardless of who is at fault you can obtain extra coverage.

If you decide to you could get collision coverage and/or uninsured motorist coverage. Collision coverage will provide funds to repair or replace your vehicle regardless of who is at fault. Uninsured motorist coverage will provide funds to repair your vehicle or medical bills if you are involved in an accident that is not your fault but one in which the other driver does not have auto insurance.

If you have a brand new or expensive vehicle you may even want to have a comprehensive plan which would compensate you for any loss to your vehicle other than a collision. For example if your vehicle is damaged by fire, a hailstorm, a flood or if it is stolen or broken into a comprehensive policy would cover the damages.

There are lots of variables regarding the different types of coverage you can get for your vehicle. And of course these variables will also have an effect on the cost of your premium payments. Once you decide on the amount of protection you need it's a good idea to shop around for quotes from a number of different providers to make sure you get the most protection at the best possible price.