Auto insurance is a type of insurance that people who own cars, trucks, and other types of vehicles can get. It protects the insured person from risks that come with owning or driving a car. This could be a car accident, damage to other cars or property, the death or injury of someone in your car, or damage to your own car.
Covers are optional.
Depending on what risks you want to cover, there are different types of insurance. You can get insurance to cover the cost of fixing your car after an accident. You can cover the cost of buying a new car if yours is stolen or damaged so badly that it can't be fixed. These covers are not required.
On the other hand, every driver must have liability insurance. This will protect you from claims that could be made against you as the driver or owner of a vehicle that damaged someone else's property, like their car, or paid for the medical bills of people hurt in an accident, even if they were in your car. Only these risks will be covered by liability insurance. If you have full coverage insurance, it will also cover risks to you and your car.
"GAP insurance" stands for "guaranteed auto protection."
But even all-around insurance won't cover all of your risks. First, there's the problem that as soon as you buy a new car, its price drops a lot because it's no longer new. People use it. So, if you wrecked your car the day after you bought it, the insurance company would probably say it was worth less than what you paid for it, even though you may still owe a lot more in payments and financing.
So-called GAP insurance was made to cover the chance that this would happen. This pays for the difference between how much your car is worth and how much you still owe in payments. GAP insurance has also become more important as the number of people who lease their cars has grown.
Extra Cover
In the US, the insurance policy usually covers both the car's owner and anyone else who drives it, as long as they don't live at the same address. For people who live at the same address, you should pay extra to add them to your insurance policy. This means that if you wreck someone else's car while they've given you permission to drive it, you'll be covered by their policy, not yours. There are policies for people who don't own their own cars that cover them when they drive other people's cars.
