Consider what types of car insurance you need, including the amount of liability you must carry

Auto insurance types: a choice of multiple options

There are multiple auto insurance policies that are available in the market and knowing which policy to choose for your particular auto vehicle is important. An auto insurance essentially provides protection or financial security to the owner in case of an accident or damage to the auto. There are different levels and terms of protection that are offered by various companies. It is important that you analyze, compare and accordingly go for the best policy term that suits your requirements the best. The type of policy you choose goes a long way in determining the protection net that you get with the policy.

Different auto insurance types:

Liability or third party insurance is one of the low premium insurance policies which is offered by some of the insurance companies. This is one of the most basic policies of auto insurance that you will get in the market. As per this policy if you are involved in an accident and it is proved substantially that the accident was your fault then the insurance company will pay the damages to the party involved in the accident. The company would essentially agree on a basic set of payment scale that it would pay in case such an accident takes place. Different companies will have different pay ceilings and rates. It is important for you to get complete clarity regarding the rate, premium, basic bracket of pay and all other terms of conditions involved in the policy from the insurance agent or the company’s representative.

The other type of insurance is comprehensive and collision insurance policy. As the name suggests the comprehensive plan includes all types of damage that can be caused to your vehicle or auto by robbery, natural disaster or any other similar occurrences except accident. The collision implies the damage incurred to your or other party’s auto by an accident. The collision policy of insurance covers the damages caused to your auto as well as the other party’s auto irrespective of who is the victim or the culprit. This is essentially where the comprehensive and collision plan is different from the liability insurance policy. The liability policy only covers the damage caused to the other party’s auto whereas comprehensive plan covers the damage caused to all the parties involved in the accident.

One other type of insurance is medical and no fault plan. In this policy the company covers the cost of medical expense incurred by you in the accident as well as other passengers involved. The no fault plan pays you regardless of who is responsible for the accident.

Word of caution:

It is very important that you do your research and ground work properly before deciding to opt for one of the policies from the insurance company. There are many fraudulent companies out there who scam consumers in the name of insurance. You must be alert to this risk and always look for customer reviews before choosing a policy from an insurance company. Proper care and attention will help you be safe and secure from scams.