Auto insurance is an agreement between you and your insurance company that can cover your car, damages you cause if you hit someone else, and other events. When you get car insurance, you’re buying “coverages,” which are essentially things your insurer agrees to pay for.
In a nutshell: It’s like paying a little now to avoid potentially paying a lot later.
How does car insurance work?
When you buy insurance, your insurer or agent will ask some pretty basic questions about you and your car, and then you’ll have some options when picking coverages. All of these factors impact your price. Generally, more coverage means a higher price. Then if you have damages or something happens, you can file a “claim” with your insurer–that’s just an insurance term for asking the company to pay for something. If it’s covered, your insurer will then pay for the damages or losses up to certain limits.
Generally, more coverage means a higher price.
Do I need car insurance?
Car insurance is required in all states, except New Hampshire (New Hampshire still requires financial responsibility if you cause an accident, so you’ll still want to be properly insured). If you drive without insurance, you could get a fine, have your license revoked, or even go to jail. Don’t panic! If you buy with Progressive, we won’t ever sell a policy that doesn’t meet your state’s requirements. And yes, most other insurers will do the same.