Auto insurance covers car owners against accidents or theft of their cars. Depending on their choices, customers get different levels of cover from auto insurance companies. Auto insurance can cover damages to the car, passengers in case of an accident or even when the car is stolen. 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.
Auto insurance companies offer the third party liability insurance as the lowest auto insurance cover. It is the most basic auto insurance cover. 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. This policy sets insurance cover payout amount in advance 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. A policy may be attractive because it charges low premiums, but it provides a minimal cover that is not practical. As the minimum level of auto insurance, the third party insurance is mandatory in most states which require a minimum insurance cover.
Another auto insurance policy provided by insurance companies is the comprehensive auto insurance. This policy covers your car comprehensively as the name suggests. 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. Although the limits for amounts to be paid out in an accident are higher for comprehensive insurance, there are maximums just like in third party insurance. 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. This type of cover pays the medical expenses of the driver and the passengers in case of an accident. This cover is a minimum requirement in some states
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The minimum legal requirements should be met by whatever auto insurance cover you choose. Recreation vehicles have their different insurance.