What is Car Insurance?
Vehicle insurance covers vehicles, motorcycles, cars, and other vehicles on the road. It’s also known as auto insurance, car insurance, or motor insurance.
Its main purpose is to protect financial security against bodily injuries that result from traffic accidents, and also liabilities that may arise from accidents in a vehicle.
The insurance of a vehicle can also provide security against the theft of vehicles and also against damages to the vehicle resulting from other events beyond traffic accidents, including natural or weather-related disasters keys, damage caused through collisions on fixed structures. The specific terms of insurance are governed by the law in each country.
Car insurance can help pay for:
- Medical expenses
- Rental fees
The state you live in may have auto insurance requirements for certain policies that you’ll need to adhere to. Find out more about these requirements by reading our definitions of auto insurance.
What is Auto Insurance?
Auto insurance is a contract with the insurer and that protects you from financial loss in the case of theft or an accident.
In exchange for you paying an amount of money, the insurance company will agree to compensate you for your losses as stipulated in the policy.
Auto insurance provides coverage for:
- Liability – your legal duty to others for physical injury or property loss.
- Property – Like damage to or theft of your car
- Medical – the cost of operating injuries, recovery, and sometimes lost earnings and funeral costs.
Basic auto insurance for personal vehicles is required by the majority of U.S. states, and laws can be different.
Auto insurance coverages are priced separately, allowing you to tailor the coverage amount to your particular needs and budget.
The policies are typically allocated for either one year or six months period and are renewable.
The insurance company sends you a notice when it’s time to renew the policy and to pay the premium.