Auto insurance protects you financially from losses that can arise from the use of personal vehicles such as passenger cars, pickup trucks, and SUVs. Auto insurance may pay to fix your car after an accident, for example, or pay to fix another person's car if you're responsible for the damages. Most auto owners are legally required to carry certain auto insurance coverage’s, such as liability.
The consumer may be protected with different coverage types depending on what coverage the insured purchases. Some states require that motorists carry liability insurance coverage to ensure that its drivers can cover the cost of damages to people or property in the event of an automobile accident. Some states, such as Wisconsin, have more flexible “proof of financial responsibility” requirements.
In the United States, liability insurance covers claims against the policyholder and generally, any other operator of the insured vehicles, provided they do not live at the same address as the policyholder, and are not specifically excluded on the policy. In the case of those living at the same address, they must specifically be covered on the policy. Thus it is necessary, for example, when a family member comes of driving age they must be added to the policy. Liability insurance sometimes does not protect the policyholder if they operate any vehicles other than their own. When you drive a vehicle owned by another party, you are covered under that party’s policy. Non-owners policies may be offered that would cover an insured on any vehicle they drive. This coverage is available only to those who do not own their own vehicle and is sometimes required by the government for drivers who have previously been found at fault in an accident. Non-owners policies are also known as Named Operator Policies. The policies are useful for people whose drivers license has been suspended and they have to have insurance for their licensed to be reinstated.