What is auto insurance?
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.
How to get car insurance
At Progressive, you can buy a policy and usually activate it the very same day. You can even print your proof of insurance or download it to your phone in most states. Insurers offer various ways to purchase insurance; here's how you can buy insurance through Progressive (prices can vary depending on how you buy):
We'll ask easy questions, then you choose coverages. Plus, we offer an online quote discount.†
Call a rep
You'll speak with a licensed representative who will guide you through everything.
Through an agent
If you want local advice, we'll connect you with a licensed, independent agent near you.
These are the coverages offered in most states, but coverages can vary. Keep in mind, insurance doesn't cover maintenance or general wear and tear.
Damages/injuries you cause
Liability insurance: In most states, this is the only required coverage. If you're in an accident and are responsible (also called at fault), liability pays for:
- Damage to other cars
- Damage to objects (mailbox, phone pole, house, etc.)
- Other drivers' and their passengers' injuries
- Lawsuits if someone sues you because of an accident
Damages to your car from acts of nature
Comprehensive: Covers those random events that are beyond your control:
- Windshield and glass damage
- Vandalism, riots, explosions, and fire
- Falling trees/branches and other objects
- Rocks or other objects kicked up by cars
- Storms, floods, wind, hail, earthquakes, and lightning
- Accidents with animals (hitting a deer)
Explore more on comprehensive insurance.
Damages to your car from accidents
Collision: Covers accidents with other cars and objects no matter who's at fault. Collision also covers you if you overturn your car.
Explore more on collision insurance.
Damage to your car from uninsured drivers
Uninsured/underinsured motorist property damage: About 13% of drivers are uninsured countrywide, according to the National Association of Insurance Commissioners. If a driver without insurance (or one without enough insurance) hits your vehicle this coverage kicks in.
Medical payments or personal injury protection (PIP): These are similar coverages. Medical payments coverage is offered in most states, while PIP is available only in the states that require it to be offered. Basically any time a car causes injuries, these coverages will both pay for:
- Medical bills if you or your passengers are injured in a car accident (no matter who is at fault)
- Medical bills if you or your family members are injured when riding in someone else's car or walking/riding a bike
PIP, which varies by state, is a bit broader and may cover other losses such as funeral expenses, lost wages, and rehab costs.
Your injuries from uninsured drivers
Uninsured/underinsured motorist bodily injury: Similar to its cousin coverage (uninsured/underinsured motorist property damage) but instead pays for injuries and lost wages.
Your out-of-pocket costs
Deductible: It's a common misconception that if you have car insurance, you don't ever have to pay for anything. Unfortunately, no insurer can promise that. All insurers have deductibles for a few coverages. Your deductible is simply the amount you have to pay for repairs or claims (your out-of-pocket costs).
For example, you have a $200 deductible, hit a telephone pole, and your car repairs cost $2,000. You'd pay $200, and your insurer would pay the rest. You can pick your deductible amount.
The higher your deductible, the more of the repair or claim cost you'll have to take on. That means your out-of-pocket costs will be higher, but you'll have a lower overall rate and vice versa.
See more on car insurance deductibles.
These are the extra coverages that are affordable to add:
Rental car fees
Rental car reimbursement: Pays rental car fees while your car is being repaired. This is important because getting a rental car can be expensive, as the average repair at Progressive takes 13 days and the cost (across the rental industry) can go up to $120 a day, according to USA Today.
Your loan if you total your car
Gap coverage: Also called loan/lease payoff and helps pay off your car loan if you total your car. It pays off the "gap" between what your car is worth and how much is left on your loan.
Explore more on how gap insurance works and how much it costs.
Lockouts, towing, jump starts, etc.
Roadside assistance: So you're never stranded on the side of the road. At Progressive, we'll pay for:
- Towing to the nearest repair facility (we'll tow you to the mechanic of your choice if it's within 15 miles)
- Pulling your stuck car out of mud, snow, water, or sand (called winching)
- Battery jump-start
- Fuel delivery (you only pay the cost of fuel)
- Flat tire changes
How car insurance is priced
Insurance companies consider a bunch of different factors, but they're really trying to answer two key questions: How likely are you to be in an accident and how much will it cost? Here are a few of the specifics insurers consider:
Safe driver: No (or few) accidents means you're less likely to have one in the future.
No speeding tickets: The slower you go, the less likely you are to have an accident.
Your car's value: A cheaper car costs less to repair.
Age: More experience behind the wheel means you're less likely to have an accident. Your rate will usually go down as you get older, though some insurers may begin to increase rates for older drivers once they reach a certain age, such as 70.