Auto Insurance: A Complete Guide for 2025
What is Auto Insurance? Auto insurance is a contract between a vehicle owner and an insurance company. In exchange for premium payments, the insurer provides financial protection against specific risks, including accidents, theft, and liability claims. Types of Auto Insurance Coverage Type of Coverage What It Covers Who Needs It Liability Coverage Pays for damages or injuries you cause to others Required by law in most regions Collision Coverage Covers repair or replacement of your car after an accident Drivers with financed or new cars Comprehensive Coverage Protects against theft, fire, vandalism, natural disasters Recommended for high-value vehicles Personal Injury Protection (PIP) Covers medical expenses for you and passengers Mandatory in no-fault insurance states Uninsured/Underinsured Motorist Covers losses if hit by an uninsured driver Essential for added protection Key Terms in Auto Insurance Term Meaning Premium The regular payment to keep your insurance active Deductib...