Auto insurance helps to protect you from financial loss in the event you have an accident. It is a contract between you and the insurance company, you agree to pay the monthly premium and the insurance company agrees to pay your losses as defined in your specific policy. The coverage provided in your policy includes property coverage, which pays for damage to or theft of your vehicle; liability coverage that pays for your legal responsibility to other for either bodily injury or property damage; and medical coverage pays for the costs associated with treating injuries from the accident, rehabilitation, and possibly lost wages or funeral expenses.
Most states have a requirement of liability insurance with lower limits that you must carry on your vehicle. If you have financed your vehicle, your lender may have higher insurance requirements.