Car insurance, a contract between a driver and an insurance company, provides financial protection against losses resulting from traffic accidents. It typically covers property damage and bodily injury inflicted on others, as well as legal defense costs. Liability insurance, a common component of car insurance, safeguards drivers against claims arising from accidents they cause.
Car insurance holds immense importance for several reasons. It ensures financial compensation for victims of accidents, regardless of who is at fault. It also provides peace of mind to drivers, knowing that they are protected against substantial financial burdens. Additionally, many countries and states mandate car insurance as a legal requirement for vehicle registration.