Auto insurance is a type of insurance one purchase’s on their vehicle in the case of an auto accident or collision. It is there to insure that in the case of a vehicle collision, you will not have to pay all the resulting damages and medical bills from your own pocket, at least not all of it.
Auto insurance is often required in many countries and states in order to legally drive on the road. This is to insure that in the event of an accident, you are financially sound enough to cover the costs and that it will not financially ruin the other person or yourself. It is basically a safety net required by law.
How much auto insurance, or whether or not you must have it, will depend on where you live. It can be very high in some areas or very low in others. For example if you live in an area that is known to have more expensive vehicles or more risk of collision ( for example a larger city or state) your minimum amount of auto insurance required by law may be much higher then that of someone living in a more rural area.
There are two main types of auto insurance that you can purchase. Firstly, there is full coverage auto insurance; this auto insurance coverage will cover your car, the insured car (if it’s different then your own vehicle) and other vehicles also involved in the incident. It is the best type of insurance to carry because it will cover all costs and will be best at keeping you out of the court system from a lawsuit.
Secondly, there is third party auto insurance which will only protect the other involved vehicles in the accident and not your own vehicle. This will protect you from liability suits but it will not cover your own costs in the event of an accident.
You can also purchase other types of auto insurance besides these main two types. There is for example auto insurance called Uninsured Motorist Coverage. This auto insurance coverage will protect the insurance person in the event that they are hit by an uninsured driver. This will be very useful as a lot of people tend to ignore the law and drive without insurance.
As well you can purchase Medical Payments Insurance. This will cover all medical costs for people in the insured vehicle at the time of the collision.
What about if my vehicle is damaged outside of an accident? What if say someone steals my vehicle or vandals set fire to it? Well, if you are concerned about that you should purchase comprehensive coverage. It will protect you from costs resulting from physical damage or theft of your vehicle.
You must be aware though that auto insurance will not cover all your costs and often only covers up to 80% of the costs of the accident or collision. You will need to pay the rest yourself. Sometimes if your vehicle is old or the parts are too expensive, the auto insurance company may decide just to give you the cost of the vehicle rather then paying the higher cost of repair or maintenance.
No matter what type of auto insurance you decide to purchase, you will need to do your research first and look into the company’s history to make sure you are purchasing legit auto insurance.