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Auto insurance protects your vehicle against many risks, such as car accidents, theft, and vandalism. And most US states require car insurance — only New Hampshire and Virginia do not.
Understanding some auto insurance basics can help ensure you don’t overpay for coverage. Here’s what you need to know about auto insurance, as well as some tips for how to lower your premium.
With Credible, you can compare auto insurance quotes from top carriers.
How does auto insurance work?
Car insurance is a contract between you and an insurance provider that helps pay for damages to your vehicle and other vehicles, any other property damage, and bodily injury that an accident causes. The specific claims process depends on the state you live in and who’s responsible for the accident, but in general, you’ll file a claim after a car accident and wait for your insurer to approve it.
Insurers determine your auto insurance premium by assessing several factors, such as your vehicle, how much coverage you get, and your driving record. Once you’re approved for a policy, you can pay it in full up front or in regular installments — you can typically choose to pay monthly, every six months, or yearly.