Car Insurance 101: What You Need To Know About Car Insurance
Car insurance is one thing that is needed by all drivers. Whether you've just got your driver's license and are looking for your first car or you've been driving for decades, auto insurance is here to protect not just you, but the other drivers on the road. Therefore, choosing the right policy – one that not only fits your budget, but also provides the right level of protection – is very important.
With that in mind, we want to answer some frequently asked questions about car insurance - What is car insurance? How does it work? What is covered? How much do you need? - so you will be better equipped to make informed decisions about your policies.
What Is Car Insurance?
Car insurance or vehicle insurance is a type of insurance purchased by vehicle owners to protect themselves from costs incurred as a result of being involved in an accident involving the vehicle. This can include damage to your own vehicle, damage to someone else's vehicle or property, legal fees, and medical bills for yourself and others, depending on the specifics of your policy.
It is important to note that personal auto insurance, which is what most people think of when they talk about auto insurance, only covers you if you are using your vehicle for personal use. This includes, but is not limited to, taking care of errands, commuting, driving to and from work, and so on. This policy may not cover you if you use your vehicle for commercial reasons, such as driving a delivery or providing a ride-sharing service. If you use or plan to use your car for business, you may need to purchase a commercial policy.
How Does Car Insurance Work?
Auto insurance works broadly the same as other types of insurance, such as homeowners insurance and health insurance.
First, you buy a policy, which defines the type and amount of protection you want. Generally, auto insurance policies must be renewed every six months, although some companies may offer policies for longer or shorter terms.
Once you buy your policy, you are responsible for paying your premiums.
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