Auto insurance covers car owners against accidents or theft of their cars. Customers get different levels of cover for their cars depending on the auto insurance policy that they choose. Auto insurance covers injury to passengers, damage to the car and in some the theft of the car. As a legal requirement, it is mandatory for car owners to have a basic insurance policy in most states. According to your choice of what you would like the insurance to cover, there are several auto insurance policies to choose from. Auto insurance policies available for car owners to choose from include third party or liability auto insurance and comprehensive or full auto insurance.
Third party or liability auto insurance is considered to be the lowest insurance cover that is offered by auto insurance companies. Third party is the most basic auto insurance cover. An auto insurance company will pay the damages of an accident to the other party in an accident if it is proven that their customer was at fault in the occurrence of the accident. This policy sets insurance cover payout amount in advance The maximum amount that can be paid by the auto insurance company in case of an accident is set when signing up for the cover. It is therefore important to know what the payout limits are and what the insurance covers. A policy may be attractive because it charges low premiums, but it provides a minimal cover that is not practical. A minimum cover is mandatory in most states, this is mostly third party insurance.
Auto insurance companies also provide a comprehensive auto insurance policy. Comprehensive auto insurance policy fully covers your car, just like its name suggests. The cost of repairing your car is paid for by the insurance company if you are involved in an accident and your car gets damaged. The insurance company usually decides on the amount that will be paid out in case of an accident. 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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Other types of auto insurance include the medical and personal injury protection. In the event of a collision, this cover caters for the medical expenses of the driver and the passengers in the car. In some states this cover is a minimum requirement.
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The minimum legal requirements should be met by whatever auto insurance cover you choose. Insurance for recreation vehicles is different from auto insurance.