What is the definition of auto insurance?

Answer 1

Auto insurance is a kind of insurance that assumes the risk of loss for occurrences involving automobiles.

In a general sense, auto liability insurance removes from the owner and/or driver of the vehicle who is At Fault for a collision the financial responsibility of paying money damages to the party who is not at fault. These damages could be for property damage or for bodily injury.

The extent to which the auto insurance company assumes this risk of loss is set forth in the terms and conditions of the written insurance policy, and is limited by the amount of insurance that was purchased.

Collision and comprehensive auto insurance pay the owner of the vehicle for damages sustained to his/her own vehicle according to the terms of the policy. These payments are generally subject to a deductible. This is the amount of money which the insured has agreed to pay toward the damage before the responsibility of the insurance company to pay is triggered.