Auto Insurance
What is it?
Auto insurance is a contract between you and the insurance company that protects you against financial loss in the event of an accident or theft. In exchange for your paying a premium, the insurance company agrees to pay your losses outlined in your policy.
Auto insurance provides coverage for:
- Property – such as damage to or theft of your car
- Liability – your legal responsibility to others for bodily injury or property damage
- Medical – the cost of treating injuries, rehabilitation, and sometimes lost wages and funeral expenses
Most U.S. states mandate basic personal auto insurance, and laws vary. Auto insurance coverages are priced individually (a la carte) to let you customize coverage amounts to suit your exact needs and budget.
Policies are generally issued for six-month or one-year timeframes and are renewable. The insurance company sends a notice when it’s time to renew the policy and pay your premium.
Who is covered by my auto insurance?
Your auto policy will cover you and other family members on your policy, whether driving your car or someone else’s car (with their permission). Your policy also provides coverage if someone who is not on your policy drives your car with your consent.
Your auto policy only covers personal driving, whether you’re commuting to work, running errands, or taking a trip. It will not provide coverage if you use your car for commercial purposes—for instance, if you deliver pizzas.
Personal auto insurance will also not provide coverage if you use your car to provide transportation to others through a ride-sharing service like Uber or Lyft. However, some auto insurers are now offering supplemental insurance products (at additional cost) that extend coverage for vehicle owners providing ride-sharing services.
