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A Guide to Auto Insurance. Car owners take auto insurance policies to cover their cars against accidents or theft. Depending on their choices, customers get different levels of cover from auto insurance companies. Auto insurance covers injury to passengers, damage to the car and in some the theft of the car. Legal requirements in some states make it mandatory for car owners to have some minimum level of auto insurance cover. Different auto insurance policies to choose from are available depending on what you would like to be covered. Third party or liability auto insurance and comprehensive or full auto insurance are some of the auto insurance covers available for car owners. The minimum level of insurance that car owners can get from auto insurance companies is the third party or liability auto insurance cover. For auto insurance covers, this is the most basic. When a third party insurance policy holder is involved in a car accident and it is proven that it was their fault, their auto insurance company will pay for damages to the other party in the accident. The amount of payout for third party insurance is set beforehand. This means that the auto insurance company sets the maximum amount they can pay in an accident beforehand. It is prudent for the policy holder to know what the insurance covers and maximum limit for payout in an accident. Covers that charge very low premiums might provide very minimal a cover that is not realistic. A minimum cover is mandatory in most states, this is mostly third party insurance. Comprehensive auto insurance is another cover provided by auto insurance companies. As the name suggests, comprehensive insurance covers your car comprehensively. If your car is involved in an accident, the auto insurance company will pay for the car or its repair. The final word on the amount to be paid out in case of an accident rests with the insurance company. Comprehensive insurance policies also set maximum amounts that can be paid out in an accident just like in third party insurance but the limits for comprehensive insurance are usually higher. Comprehensive insurance is usually optional in most states and it is up to the consumer to choose if they need it.
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There are other kinds of auto insurance like the medical and personal injury protection cover. This type of cover pays the medical expenses of the driver and the passengers in case of an accident. In some countries or states, having this cover is a minimum requirement.
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Whatever auto insurance cover you settle for ensure that it meets the minimum legal requirements. Recreation vehicles have their different insurance.