And both types base your premium on an analysis of your riskiness as a covered person and the value of the property involved. On the other hand there are important differences from a homeowners policy. For example, there is also a distinct medical coverage that you must get to cover injuries to you and your passengers incurred in an accident, up to a set limit per person. While many state require you to carry liability insurance, the amount they require you to cover is often quite small. If you have any assets at all you will want to protect them from a judgment by getting the appropriate amount of insurance.
Many states require drivers to participate in a no-fault insurance system.
Under this system, some damage and some costs are automatically covered by the driver's own insurance, regardless of who is at fault. But keep in mind that this only concerns the relationship between you and the other driver. Another difference from homeowners insurance is that premiums for auto insurance are based on much more complicated formulas. Insurers check your driving record going back several years, and want to know how often you drive, how far, from where and to where. Everything you need for court related issues.