Final answer:
Automobile insurance is a type of insurance policy that covers the costs of repairing or replacing the damaged property of others involved in a collision. The premium is the annual fee paid by the policyholder to receive this coverage.
Step-by-step explanation:
Automobile insurance is a type of insurance policy that provides coverage for financial losses resulting from vehicle accidents. In this example, the insurance policy covers the costs of repairing or replacing the damaged property of others involved in a collision. The policyholder pays a premium, which is an annual fee set by the insurance company, to receive this coverage. The total premium collected by the insurance company is used to cover the costs of accidents that occur within a given year.