It is an agreement between you and your insurer in which you pay the insurance company a certain amount of money and, in return, the company will help protect you from major financial losses due to an accident for a given period of time.
Accidents happen, even to the best drivers. Insurance can help cover repairs to your vehicle and medical costs. It is your firewall against economic disaster should you cause an accident and there is property damage or injuries to other people.
It’s a package made up of several different primary coverages. The coverages may vary depending on the state where you live. Your premium is the added total of the separate coverages for a given period of time.
Bodily injury liability: Pays for bodily injury or death resulting from an accident for which you are at fault and in most cases provides you with a legal defense.
Property damage liability: Provides you with protection if your car accidentally damages another person’s property, and in most cases, provides you with a legal defense.
Medical payments, no-fault or personal injury: Usually pays for the medical expenses of the driver and passengers in your car incurred as a result of a covered accident regardless of fault.
Uninsured and or under-insured motorist: Pays for your injuries and, in some circumstances, certain property damage caused by an uninsured, under-insured, or a hit-and-run driver.
Comprehensive coverage: Pays for damage to your car from theft, vandalism, flood, fire, and other covered perils.
Collision coverage: Pays for damage to your car when it hits or is hit by another object.