Auto insurance protects you from the costs that arise if you are involved in an accident. Your auto insurance policy is a contract between you and an insurance company. You pay a premium (the cost of your policy) to the insurance company and they pay for any covered losses defined in your policy. Your insurance agent helps you find an insurance company with the lowest premium. There are 3 types of coverage provided by an auto insurance policy:
- Liability
- Covers the costs you are liable to pay if you injure, kill, or damage another person or their property.
- Liability coverage is required in many States.
- Property
- Covers the cost to repair or replace your car if it is damaged or stolen.
- Medical
- Covers the medical and funeral expenses if you or a passenger in your car is injured or killed in an accident.
- It also covers you and your family members if they are hit by a car while walking or riding in another vehicle.
Each type of coverage provides protection up to the limits stated in your policy and some may be subject to a deductible. Typically, an auto insurance policy lasts for either six or twelve months.
