Many people add collision and comprehensive coverage, which means the insurer insures the car if it’s stolen, you get in a crash, etc. They will pay to fix or replace your car and the car of the person you hit. You can also have them cover your medical bills and those of your passengers. Also, most people don’t realize that your insurance company hires the lawyer to defend you if you get sued by another driver you hit.

Check the policy to see what is covered and what’s not. Typically there’s a deductible that you pay before the insurance company pays out. So if your deductible is $1,000 and you caused $5,000 worth of damage, you pay the first $1,000 and the insurance pays the rest. The higher the deductible, the lower your premium. Of course, when you report an accident, cause an accident, or get a moving violation, your rates are likely to go up because the insurer views you as a bigger risk for them having to pay.