Car insurance protects you against financial loss in the case of an accident or theft. Here's a look at the different types of coverage you can choose. It’s a question all drivers should know the answer to: What does car insurance cover?While auto insurance policies can vary in terms of premiums, deductibles, and coverage limits, basic car insurance typically provides these types of coverage. Liability Liability coverage, required by law in most states, is the foundation of car insurance policie