An Introduction to Auto Insurance

An Introduction to Auto Insurance

Auto insurance, vehicle insurance, motor insurance or car insurance is all the same. It is a contract for an automotive or vehicle in which one party agrees to pay for another party’s financial loss resulting from an accident, theft or other catastrophe.

Car insurance is mandatory in some of the states. To get auto insurance today is not a big issue at all as are so many big insurance companies offering insurance for your vehicle on certain terms and conditions. Whenever you buy auto insurance, you are buying a Policy. It is important to take in consideration certain points before buying any policy. You have to pay a certain amount depending on the type of coverage you choose for your vehicle. So, it is important to consider the coverage type which best suits you and you vehicle.

Types of Auto Insurance Coverage (Policies)

Hereunder, we will discuss some of the important coverage types, which auto insurance companies offer to its customers.


It is the most common type of auto insurance. Liability insurance pays to the second party for all the damages in case any accident has occurred, if the person operating the car was found liable for the accident. But keep this thing in mind that this type of policy will not pay you any expenses.

Full Insurance

The monthly payments will be based on your car make and model, if you choose the full insurance s policy for your car. Full insurance will always cover both the parties in case of any disaster or calamity.


Collision policy will pay for the damages to your car caused by an accident or crash (collision) with another car or any other automobile.


Comprehensive policy does not pay you in case of any accident. Comprehensive policy covers the loss incurred by fire, flood, storm or theft etc.

Medical Insurance Policy

Medical insurance covers the medical expenditures of the party in case of any accident.

Personal Injury Protection (PIP)

Medical insurance and personal injury protection are almost the same. Both cover the medical expenditures for the insured driver. They provide treatment expenses to the driver regardless of fault.

Rental Reimbursement (compensation)

Rental reimbursement provides compensation to the driver who caused damaged to a rental car. This policy pays the stated amount of the insurance for the rental car. This policy often has a daily allowance for rental car.

Uninsured and Under-Insured Motorist Coverage

This policy provides you help in case the careless driver has no insurance policy or limited insurance policy.

It is better to have a thorough study of the policies offer by different insurance companies. It will help you to choose the more appropriate policy type for your vehicle. Compare and study the rates and advantages of the different auto insurance policies closely before selecting one for your vehicle.

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