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Automobile insurance protects you financially by paying the other driver’s car repair and medical bills if you cause an accident. Depending on the kind of coverage you have, it can also pay to repair or replace your car if it’s damaged or stolen.  Your State has a Consumer Bill of Rights for auto insurance. Your insurance company will give you a copy of the bill of rights when you get or renew a policy.  Is auto insurance required? Every state law requires drivers to show proof they can pay for the accidents they cause. Most drivers do this by buying auto liability insurance. Liability insurance pays to repair or replace the other driver’s car, or other damaged property, and pays other people’s medical expenses when you’re at fault in an accident.  If you still owe money on your car, your lender will require you to have collision and comprehensive coverage.