Auto Insurance, or Car Insurance, or Automobile Insurance is insurance which protects the insured against losses involving the use of automobiles. Various coverages may be bought depending on the desires of the insured. Such coverages include the liability coverages of bodily injury, property damage, and medical payments, and the physical damage coverages of collision and comprehensive.
The most important thing to do when you are looking for the best auto insurance is to visit and check out at least 3 different auto insurance sites. Then you can easily compare their various rates and services. Just doing this simple comparison can save you thousands of dollars. Don’t be lazy. Take the time and you can make a huge saving!
There are basically six different types of coverages. Some may be required by law. Others are optional. They are:
AUTO INSURANCE PREMIUM: The price an insurance company charges for coverage, based on the frequency and cost of potential accidents, theft and other losses. Prices vary from company to company, as with any product or service. Premiums also vary depending on the amount and type of coverage purchased; the make and model of the car; and the insured’s driving record, years of driving and the number of miles the car is driven per year. Other factors taken into account include the driver’s age and gender, where the car is most likely to be driven and the times of day – rush hour in an urban neighborhood or leisure-time driving in rural areas, for example. Some insurance companies may also use credit history-related information.
COLLISION AUTOMOBILE INSURANCE: The coverage provided in an automobile insurance policy that insures the insured's automobile against physical damage that results from collision with another inanimate object.
COMPREHENSIVE CAR INSURANCE: For damage to the policyholder's car that doesn't involve a collision with another car. Covered risks include fire, theft, falling objects, missiles, explosion, earthquake, flood, riot and civil commotion.
BODILY INJURY LIABILITY COVERAGE: Portion of an auto insurance policy that covers injuries the policyholder causes to someone else.
COMPULSORY AUTO INSURANCE: The minimum amount of auto liability insurance that meets a state law. Financial responsibility laws in every state require all automobile drivers to show proof, after an accident, of their ability to pay damages up to the state minimum. In compulsory liability states this proof, which is usually in the form of an insurance policy, is required before you can legally drive a car.
GAP INSURANCE: An automobile insurance option, available in some states, that covers the difference between a car’s actual cash value when it is stolen or wrecked and the amount the consumer owes the leasing or finance company. Mainly used for leased cars
NO-FAULT: Auto insurance coverage that pays for each driver’s own injuries, regardless of who caused the accident. No-fault varies from state to state. It also refers to an auto liability insurance system that restricts lawsuits to serious cases. Such policies are designed to promote faster reimbursement and to reduce litigation.
