They might be able to quote a better rate. General Questions and Answers Recommended Auto Insurance Companies Useful Terms General Questions and Answers 1. An auto insurance policy is a contract between you and an insurance company. You pay a premium. In exchange, the insurance company promises to pay for specific car-related financial losses that you may have during the term of the agreement.
Auto insurance is a legal requirement in most states.
An insurance policy is the easiest way to document that you can pay damages if you must. You also need auto insurance to protect yourself financially. If you or anyone for whom you're responsible seriously injures another person, you can be held liable for the injured person's medical expenses, rehabilitative therapy, and long term nursing care, as well as for his or her lost earnings. As an example, if you or anyone in your household should happen to injure a bright, young medical student to such an extent that the medical student is prevented from practicing medicine for the rest of his life, you could find yourself the object of a judgment that could force you into personal bankruptcy. However, even personal bankruptcy would not relieve you of the obligation of paying the judgment as a result of injuries to that young student.