What is Auto Insurance?

Auto insurance provides financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise from at fault accidents.

Auto insurance may also offer financial protection against theft of the vehicle and damage to the vehicle, sustained from things other than traffic collisions.

Auto Insurance Coverage

There are basically six different types of coverage. Some may be required by law. Others are optional. They are:
 

• Bodily injury liability - for injuries the policyholder causes to someone else.
  
  
• Medical payments or Personal Injury Protection (PIP) - for the treatment of injuries to the driver and passengers of the policyholder’s car.


• Property damage liability - for damage the policyholder causes to someone else’s property.


• Collision - for damage to the policyholder’s car from a collision.


• Comprehensive - for damage to the policyholder’s car not involving a collision with another car (including damage from fire, explosions, earthquakes, floods, and riots), and theft.


• Uninsured motorists coverage - for costs resulting from an accident involving a hit-and-run driver or a driver who does not have insurance.