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What is auto insurance?
Auto insurance protects you against financial loss if
you have an accident. It is a contract between you and the insurance
company. You agree to pay the premium and the insurance company agrees
to pay your losses as defined in your policy.
Auto insurance provides property, liability and medical coverage:
- Property coverage pays for damage to or
theft of your car.
- Liability coverage pays for your legal
responsibility to others for bodily injury or property damage.
- Medical coverage pays for the cost of
treating injuries, rehabilitation and sometimes lost wages and funeral
expenses.
An auto insurance policy is comprised of six different kinds of
coverage. Most states require you to buy some, but not all, of these
coverages. If you're financing a car, your lender may also have
requirements.
Most auto policies are for six months to a year. Your insurance company
should notify you by mail when it’s time to renew the policy and to pay
your premium.
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