What does my car insurance policy cover or protect me from?

In a word, loss. Insurance protects you in case of loss of your vehicle or damage to the same. Your policy should cover costs of repair or replacement of your car, but your insurance may also cover some other things. Medical expenses or medical claims from other persons involved in an accident, towing charges, any vandalism to your vehicle or theft, and legal expenses are common areas of coverage. Your vehicle insurance policy might ensure coverage for all these things or only some of these expenses, so check your policy to be sure.

What type of insurance coverage do I need for my car?

That depends on your needs. A good rule of thumb for automobile insurance coverage is that if you don’t own your car outright, you should make sure that your vehicle is completely covered with collision coverage for full repair or replacement in case of accident. Otherwise, you could easily end up making loan payments on a stolen car while having to take out a new loan to buy a replacement vehicle. Comprehensive coverage will cover expenses in the case of a theft, a fire, or a flood. Liability coverage will cover costs if you’re at fault in an accident and have damaged another person’s vehicle. Liability coverage will also cover the other person’s medical expenses or loss of wages related to the accident.

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