Auto Insurance – the basics.

Auto insurance is required by most states and provides you with some financial protection in the event of an accident. 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 as detailed in your policy.

Auto insurance typically 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 medical injuries, rehabilitation and sometimes lost wages

Who does my auto insurance cover?

Your auto policy will cover you and family members on your policy, whether driving your car or someone else’s car (with their permission). Your policy can also provide coverage if someone who is not on your policy is driving your car with your consent.

Your personal 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, such as Uber or Lyft.

What other types of auto insurance coverage are typical?

Basic, legally mandated auto insurance covers the damage your car causes, it does not cover damage to your own car. To cover your own car, you should consider these optional coverages:

• Collision reimburses you for damage to your car that occurs as a result of a collision with another vehicle or other object, such as a tree or guardrail, when you’re at fault. Collision coverage will not reimburse you for mechanical failure or normal wear-and-tear.
• Comprehensive provides coverage against theft and damage caused by an incident other than a collision, such as fire, flood, vandalism, falling rocks, hail and other hazards.
• Glass coverage provides coverage from windshield damage. Some policies include no-deductible glass coverage, which also includes side windows, rear windows and glass sunroofs. Or you can buy supplemental glass coverage.