To see a list of highly rated insurance providers in your area, select your state and click the button below.

What Is Car Insurance?

If you drive a car you probably have car insurance. In most states it is required by law. But what is car insurance? In this article I will answer that question in hopes that you will have a better understanding of exactly what car insurance is.

When you obtain a car insurance policy you have entered into an agreement with the insurance company. You pay your premiums and in exchange for the money that you paid to the insurance company they take on any financial responsibility for losses due to injuries or property damage up to a certain dollar amount as defined by your policy.

The minimum amount of insurance you can get would be liability coverage only. If you are at fault in an accident liability coverage will cover damage caused to the other person's car and will cover their medical bills but does not pay for damages to your car. If you want to make sure that your car and medical bills will be covered whether you are at fault or not you can get additional coverage.

If you choose to you could get collision coverage and/or uninsured motorist coverage. Collision coverage will pay to repair your vehicle whether you were at fault or not. Uninsured motorist coverage will pay to repair your car if you are in an accident in which you are not at fault but the other driver does not have car insurance.

If you have a new or expensive car you may even want to have a comprehensive policy which would reimburse you for any loss to your vehicle other than a collision. For example if your car is damaged by fire, a hailstorm, a flood or if it is stolen or broken into a comprehensive policy would pay for the damages.

There are lots of variables in terms of the different types of coverage you can get for your car. And of course these variables will also affect the cost of your premium payments. Once you decide on the amount of coverage you want it's a good idea to shop around for quotes from several different companies to make sure you get the most coverage at the best possible price.