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Car Insurance

Definition - What does Car Insurance mean?

Car insurance is a legally binding agreement between a policyholder and an insurer, in which the insurer agrees to compensate the policyholder for driving-related losses up to a certain amount.

Drivers of cars can face losses when they are held liable for causing damage due to things like accidents or property destruction.

Justipedia explains Car Insurance

Car insurance is generally required by law in the United States for a person to be able to operate a vehicle. The reason for this is because accidents frequently happen while people are driving cars. Without car insurance, drivers could be held personally liable with no financial assistance for any damage that they cause.

Damage from auto accidents can easily be tens of thousands of dollars. Car insurance helps to provide coverage that can assist drivers when they cause damage to other people or their property.

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