Protect Your Vehicle and Finances
Auto insurance helps cover your financial risk if your vehicle is involved in an accident that causes physical injury or property damage. Some states require vehicles owners to carry a minimum level of liability insurance and keep proof of coverage. If you are financing a vehicle, your lender may also specify the type of coverage you must maintain.
Auto Liability Insurance Basics
Auto liability insurance covers claims against the policyholder and certain other drivers who are authorized to operate the insured vehicle. Household members who live at the same address typically must be included on the policy. Liability coverage protects against bodily injury or property damage for which the insured driver is found responsible. Coverage limits vary by state and policy, and can often be increased by paying an additional premium. Policies also set maximum payments per person and per accident.
Full Auto Insurance Coverage
Many states only require liability coverage, but full auto insurance combines liability, collision, and comprehensive coverage. Collision coverage pays to repair or replace your vehicle if it is damaged in a collision, subject to a deductible. Comprehensive coverage protects against non-collision incidents, such as weather, theft, fire, vandalism, or impacts with animals, and may also include certain natural disasters. Some policies include loss-of-use coverage, which pays for a rental car while your vehicle is being repaired.
Cost of Auto Insurance
The cost of auto insurance depends on factors such as your vehicle type, the age and gender of covered drivers, driving history, and where the vehicle is stored and driven. Higher-risk situations result in higher premiums. Carrying the state-required minimum coverage is important, as failing to do so can result in fines and penalties.