What is the main purpose of automobile insurance?

The main purpose of automobile insurance is to provide protection against traffic collision damages. This type of insurance typically covers the financial costs associated with damage to your vehicle and, in many cases, damage to another party's property as well. It helps ensure that drivers can manage the expenses related to a collision, which can include repair costs for vehicles, medical expenses for injuries sustained in accidents, and legal fees if the driver is sued as a result of the accident.

While automobile insurance may offer additional coverages, such as liability for personal property damage or health coverage in some cases, its core function revolves around protecting against the financial impact of accidents on the road. Accumulating savings for vehicles is not a purpose of automobile insurance; rather, the insurance serves as a safeguard against unforeseen events that could lead to significant financial strain.