A car insurance or auto insurance involves an agreement that protects you against financial loss due to an unexpected accident or damage to your vehicle. In other definition it is a protection for a consumer that shields private passenger carrying automotive vehicle owners from monetary losses if in case a vehicle they own is involved in any type of accident.
When a consumer and an insurance company establish specific protections involving vehicle ownership, a contract or policy is formed.
A car insurance policy is a signed agreement between you and the insuring company wherein you agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy.
Within the contract/policy, as mentioned above, consumers agree to allocate funds called “premiums” while the insurance company agrees to provide benefits that cover setbacks in case a vehicular accident happen which causes damages.
Damages can include property, physical injury, medical treatments, or death as established in the car insurance policy.