What is car insurance?
Car insurance is a contract between you and your insurance company that helps pay for covered losses up to your policy limits in exchange for a premium. Your premium is the amount you pay for coverage. Most policies also include a deductible, which is what you pay out of pocket before insurance helps cover a claim. Higher deductibles typically mean lower premiums, and lower deductibles usually mean higher premiums.
Explore Progressive Answers' auto editorial guidelines to find out why you can trust the car insurance information you find here.
How does car insurance work?
Car insurance works as a safeguard for your financial well-being in case of car accidents, theft, or other auto incidents beyond your control. Depending on your coverages, your car insurance company can help pay for property damage and injuries you cause others while driving, as well as repairs to your vehicle, your medical expenses, and other costs after an accident.
Two essential components of any policy are your premium and your deductible.
- Your premium is the amount you pay, typically monthly or every six months, to keep your policy active.
- Your deductible is the amount you pay out of pocket before your insurance kicks in on a covered claim. Generally, choosing a higher deductible lowers your premium, and a lower deductible raises it.
Watch this quick guide to how car insurance works. The video includes definitions of important terms, what coverage is required by law, and more.
Do I need car insurance?
Auto liability insurance is required in nearly every state. Liability coverage helps pay for injuries or property damage you cause to others in an accident. Progressive, like most other insurers, will make sure any policy you select meets your state's requirements.
Driving without insurance can result in fines, license or registration suspension, and even jail time depending on the state. You may also be personally responsible for paying accident-related costs if you're uninsured.
What does car insurance cover?
Auto insurance helps cover certain driving-related incidents, depending on the coverages you choose. Required coverages vary by state, but these are the standard coverages on many auto insurance policies:
Liability
Auto liability coverage is required in nearly every state. If you're found at fault in an auto accident, liability coverage can pay for damage to other vehicles, damage to objects, bodily injuries to other drivers and their passengers, and lawsuits if you're sued due to an accident.
Comprehensive
Auto comprehensive coverage protects against damage to your car caused by events that are out of your control, including theft, windshield and glass damage, vandalism, falling trees, and more.
Collision
Auto collision coverage covers your vehicle if it overturns or collides with another vehicle or object, including trees, guardrails, and fences.
Medical payments (MedPay)
Medical payments coverage helps pay medical expenses for you and your passengers after an accident, regardless of fault.
Personal injury protection (PIP)
Personal injury protection helps pay medical expenses for you and your passengers after an accident and may also cover related costs, such as lost wages and household services, regardless of fault. PIP is required in some states, known as no-fault states, and is optional or unavailable in others.
Uninsured/Underinsured motorist bodily injury (UM/UIM) and property damage (UMPD)
UM/UIM can pay for injuries to you and your passengers if you're hit by a driver who has no insurance or not enough coverage. UMPD can help pay for damage to your vehicle in a similar situation.
Other optional coverages
Rental car reimbursement
Rental car reimbursement coverage can pay for a rental car while your vehicle gets repaired or replaced after an accident.
Roadside assistance
Progressive's Roadside Assistance provides help if your vehicle is disabled on the road — for instance from a flat tire, dead battery, running out of gas, and more.
Loan/lease payoff coverage
Similar to "gap insurance," loan/lease payoff coverage may cover the difference, up to certain limits, if you owe more on your vehicle than it's worth and your car is stolen or totaled. Progressive's loan/lease payoff coverage covers up to 25% of your vehicle's actual cash value (though the exact limit can vary by state).
Explore more auto insurance coverage options with Progressive.
What does car insurance not cover?
A basic car insurance policy won't cover:
- Maintenance or mechanical failures
- Wear and tear
- People who regularly drive your car but aren't listed on your policy
- Driving on a ridesharing platform
However, you can sometimes add coverage or purchase a separate insurance policy or car warranty to cover the things your auto policy doesn't. For example, you can add rideshare coverage to your Progressive auto policy if you drive for a ridesharing service.
How much car insurance do I need?
At a minimum, you need your state's required liability coverage. Your state might also require some amount of UM/UIM and PIP or medical payments coverage. If you have a car loan or lease, your lender might require comprehensive coverage and collision coverage as well. If you're unsure what your state requires, use our state-by-state guide to look up your specific requirements. For a clearer picture of how much coverage makes sense for your situation, explore our guide on how much car insurance you need.
How is car insurance priced?
Insurers consider many factors when determining your auto policy rate, including your age, driving history, location, and car make and model. Check out our car insurance discounts and tips for getting cheap car insurance.
How to get car insurance
Call a rep
Talk with a licensed representative who can guide you through the process.
Call 1-866-749-7436
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