{{Main|Vehicle insurance}}

[[File:2008-07-23 Wrecked car in Durham 2.jpg|thumb|180px|right|A wrecked vehicle]]

Auto insurance protects you against financial loss if you have an accident. It is a contract between the insured and the insurance company. You agree to pay the premium and the insurance company agrees to pay losses as defined in the policy.

Auto insurance provides property, liability and medical coverage:

# Property coverage pays for damage to or theft of the car.

# Liability coverage pays for the legal responsibility to others for bodily injury or property damage.

# Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.

An auto insurance policy comprises six kinds of coverage. Most countries require you to buy some, but not all, of these coverages. If you're financing a car, the lender may also have requirements. Most auto policies are for six months to a year.

In the [[United States]], the insurance company should notify you by mail when it’s time to renew the policy and to pay the premium.{{cite web | author = Insurance Information Institute | authorlink = Insurance Information Institute | title = What is auto insurance? | url = http://www.iii.org/individuals/auto/a/whatis/ | accessdate = 2008-11-11 }}