If you have been driving on the roads you know how dangerous it can get especially during rush hours. Accidents are bound to happen and even though people do not really get hurt at times, fenders do get bent and your car can get damaged. It is obvious that everyone needs auto insurance.

Auto insurance protects you against financial risks (personal injuries as well as property damage) that are due to auto accidents, vandalism and theft. You are required to purchase liability coverage (a minimum amount) in the US. Any other type of auto insurance may be either required as per law or optional depending on the regulations of each state. Lenders also need you to buy coverage for the car you have purchased on loan or leased.

The state mandatory legal coverage includes:

* Liability for bodily injury: If you are held liable when other people are killed or injured in an auto accident, then your assets are protected.

* Liability for property damage: Covers replacing or repairing the autos or other people's property.

* Legal costs related to your defense against lawsuits associated with accidents are also paid for.

Coverages regarding comprehensive (your car is insured against any damage caused by fire, theft, vandalism, theft etc; collision (pays to replace or repair your car if it is damaged in an auto accident); underinsured and uninsured motorist (this insures you against losses that are caused by others with no (uninsured) or little (underinsured) auto insurance and also covers lost wages etc; and medical payments or PIP - personal injury protection (covers medical/funeral etc expenses) are optional in many of the states but it makes sense to buy them unless you can pay for those losses yourself.

Additional coverages that provide protection and are relatively cheap are:

Towing/roadside or labour assistance: This covers the towing costs to a repair garage after an accident that is covered. It also covers minor repairs, towing and fuel delivery even without an accident.

Gap Coverage: Also called the Lease/loan coverage this pays any difference between the amount you owe on your lease/loan if your car is damaged in a covered accident and the actual value of your car.

Rental reimbursement: This pays the amount it costs to rent a replacement car if your car has been damaged in a covered accident.

It is important to know of certain aspects of insurance that you would have to cover yourself.

Deductibles: This is the amount that you agreed to pay from your own pocket. There are different deductibles for various coverages and liability coverages do not have deductibles.

Exclusions: These are situations and Events that your insurance will not cover such as personal injury or property damage that you have caused intentionally because of wear and tear or mechanical failure.

Costs over policy limits: Any additional expenses that exceeds the amount that is listed in your policy for the coverage you are entitled to get.

There are many factors that influence your auto insurance premium like the state you live in, your age, the model and make of your car, your driving record, etc.