Auto insurance is important because it protects you against exposures that could cause a financial loss if you have an accident. When you get an auto policy, you make a legally binding agreement with your insurance company to pay your premium in exchange for protection. Auto insurance provides coverage for property damage, liability and medical expenses:
- First party or property coverage pays for vehicular damage you sustained or for theft of your vehicle
- Liability coverage pays for bodily injury or property damage should you be deemed negligent for a loss
- Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.
There are various kinds of coverage under an auto policy. Having some form of auto insurance is a requirement in most states. If your vehicle is currently being financed, your lender might have certain requirements. Most auto policies are for 6 months or a year. During your policy renewal period, your insurance carrier will notify you. You will also be notified when it is time to pay your premium.