I am about to buy an auto insurance for my car. I don't really get how insurance in cars would work (or any type of insurance for that matter). I am paying $800 for the first year to insure the car. Can someone help me what this insurance would entail? Thanks!

Auto insurance indemnifies you for losses too large for you to pay yourself. It works by pooling risks (that's the insured) It works by statistics. If you get 100 people to buy insurance and pay for it; only a certain percentage of people will have losses. The pooled money pays the losses, and the insurance company makes a profit. (supposedly)(auto insurance has been losing for decades, it is held up by other lines of insurance) Some people think it's like gambling, it isn't. Some people think insurance is something for them to make false claims and they get money. That's insurance fraud. Insurance is a great idea, it goes back to biblical times and it actually underpins the economy. Big business cannot afford catastrophic loss either. The only thing you need to watch is how strong the company is. You basically want to know if they pay their losses or not. An independent agent is better because he or she writes for multiple companies and can help you get a better deal. You have a good deal at $800 / year. Just keep your driving record clear and be honest with the company and when you do have a loss, you will be glad for the insurance company. I hope that helps.

Check out our article on how car insurance is calculated