If speaking legally auto insurance is a contract between you and the insurer which entitles the auto insurance company to charge you a certain fee in return for the loss coverage in case of an accident or other situations defined in your auto insurance policy.

There are six different types of auto insurance coverage that are included in the policy. The amount and types of coverage required by legislation differ from state to state. If you are using an auto loan to finance your car purchase, your lender may also require you to add certain types of coverage into the policy.

The duration of a typical auto insurance policy is from six to twelve months. Your insurer will notify you when to renew your policy and pay the annual premium.