How does it work?
Auto insurance covers the party that is at fault in an accident, although certain types of insurance may pay for some things even if you weren't at fault. If you are involved in an accident you must contact your insurer and start a claim. The insurer will investigate and then pay if it is obligated to, minus whatever deductible amount you are responsible for.
Different types of coverage
There are several main types of car insurance. Liability insurance is the minimum most states require. It pays for damages you cause to other drivers if you are at fault in an accident. Collision insurance pays for damages to your own car if you are at fault in an accident. Comprehensive insurance covers damages not caused by an accident with another car, such as weather damage, fire damage, vandalism and theft. Other types of coverage include uninsured motorist protection and personal injury protection.
The major benefit of car insurance is that you have financial coverage in case you cause an accident and won't have to pay costs out of pocket. Another advantage of having insurance is that in most states you can't register your car without it.