A childhood belief about cars

When I was around three years old, I overheard my mother and grandmother talking about car insurance. I asked them what car insurance was. My mother tried to explain, saying something like, "it's a piece of paper that protects your car in case of an accident". I tried to picture this scenario. I imagined a small piece of paper from one of those sticky-pads I liked to draw on at home, stuck on one spot on the front of a car. I became completely confused, wondering how one piece of paper could protect your car in an accident.