Because of the expensive potential of such liability, automobile insurance is the practical financial safeguard that vehicle owners should have in the event of an accident. Insurance regulations vary from state to state. States also set minimum levels of liability insurance coverage. Liability insurance does not cover your medical costs or damage to your vehicle. Collision insurance covers losses you incur in an accident.
Comprehensive coverage pays for auto damage caused by theft, fire, or vandalism.
Rates and terms for insurance policies vary from company to company, so it pays to shop around. Insurance companies set their rates based on certain criteria, including age, sex, marital status, driving record, geographic location, the car s model year, and its primary use. For example, insurance rates for male drivers under the age of 21 are much higher than those for an adult because research has shown that these young drivers are more likely to have accidents. One way to lower the premium is by agreeing to pay a higher deductible, or the amount per accident you agree to pay yourself. Some drivers gamble by not purchasing insurance, risking seizure of their assets or wages to pay for damages.