Car insurance, also known as auto insurance, or motor insurance, protects cars, trucks or other vehicles against damages incurred as a result of traffic accidents. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy. The car insurance also protects against liability incurred in an accident. In many countries, in order to use or keep a vehicle on public roads, the vehicle must be first insured. If you are involved in an accident or have your car stolen, owning the right kind of auto insurance can help to ease a difficult situation. It also helps minimize the financial losses in case of accident, theft, or fire.

Car insurance can cover the insured party, the insured vehicle, and/or third parties. Different policies apply for each covered item. Be sure to inform yourself before purchasing your insurance. Having insurance does not mean you will not pay for repairs. You will still pay the deductible, a fixed contribution, each time your car is repaired through the insurance policy. This is paid at the garage, when you pick up the vehicle. Most auto policies are for six months to a year. Your insurance company should notify you by mail or phone when it’s time to renew the policy and to pay your premium.

Young divers with no driving record have higher car insurance premiums. However, if they continue their driving training on recognized courses, they can benefit from discounts. Young female drivers obtain better discounts than young male drivers because it is known that females make less miles per year. This means a lower accident risk and a lower premium. However, for senior drivers, insurance is often unisex, with the same premiums and discounts.