What is auto insurance?

Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy. Auto insurance provides property, liability and medical coverage:

Property coverage pays for damage to or theft of your car.

Liability coverage pays for your legal responsibility to others for bodily injury or property damage.

Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.

An auto insurance policy is comprised of six different kinds of coverage. Most states require you to buy some, but not all, of these coverages. If you're financing a car, your lender may also have requirements. Most auto policies are for six months to a year. Your insurance company should notify you by mail when it’s time to renew the policy and to pay your premium.

What is the difference between comprehensive and collision?

Generally, Collision insurance covers damage to your automobile caused by collision with another object or by upset. Comprehensive covers damage to your automobile for things other than Collision such as; vandalism, hitting an animal, hail damage, flood water, theft or glass breakage.

If you are making payments on your vehicle, your lien holder will usually require you carry these physical damage coverages. They require these coverages, because they cover the vehicle up to its actual cash value and until the car is paid off the vehicle technically belongs to them. However, if your vehicle is paid for, it is your choice to purchase Comprehensive and Collision coverages.

What does UM/UIM insurance do for you?

One component of insurance policies should be Uninsured or Underinsured motorist coverage (UM/UIM).  When purchasing or upgrading a policy, you will want to make sure that you have these as a part of a policy.  These coverages will protect you and your passengers in the car, in the event that you are in an accident and the other party involved has no or too little insurance to cover the damage to your car, medical bills and expenses.