Personal Auto

 

Auto insurance is a policy purchased by vehicle owners to mitigate costs associated with getting into an auto accident. Instead of paying out-of-pocket for auto accidents, people pay annual premiums to an auto insurance company; the company then pays all or most of the costs associated with an auto accident or other vehicle damage.

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Understanding Auto Insurance

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Auto insurance premiums vary depending on age, gender, years of driving experience, accident and moving violation history, and other factors. While not all states require car insurance, most do mandate a minimum amount of auto insurance. That minimum varies by state, but many people purchase additional insurance to protect themselves further. Additionally, if you're financing a car, the lender may stipulate that you carry certain types of car insurance.

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A poor driving record or the desire for complete coverage will lead to higher premiums. However, you can reduce your premiums by agreeing to take on more risk, which means increasing your deductible.  Policies are priced individually to let you customize coverage amounts to suit your exact needs and budget. Policy terms are usually six- or 12-month timeframes and are renewable. An insurer will notify a customer when it’s time to renew the policy and pay another premium.

 

Reference:  https://www.investopedia.com/terms/a/auto-insurance.asp