Auto insurance is a contract between a vehicle owner and an insurance company that provides financial protection in case of accidents, theft, or damage involving the vehicle. The policy typically covers a range of risks, including:

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1. Liability Coverage: Pays for damages or injuries to other people or property caused by the insured driver’s actions.

2. Collision Coverage: Covers damage to the insured vehicle from a collision, regardless of who is at fault.

3. Comprehensive Coverage: Pays for damage to the vehicle caused by incidents other than a collision, such as theft, vandalism, or natural disasters.

4. Personal Injury Protection (PIP): Covers medical expenses and sometimes lost wages for the driver and passengers, regardless of who caused the accident.

5. Uninsured/Underinsured Motorist Coverage: Protects against damages caused by a driver who doesn't have sufficient insurance or any at all.

Auto insurance policies vary based on the level of coverage, deductible amounts, and the specific insurance provider. The purpose is to reduce financial risk for the vehicle owner in the event of an incident.