subject: Three Common Types Of Auto Insurance [print this page] Every car owner should have auto insurance, and when buying insurance, it's important to consider what kind and how much coverage you want. For instance, many drivers should have full, comprehensive auto insurance. Although comprehensive coverage is the most expensive type of insurance, it is necessary for almost any financed vehicle.
Comprehensive auto insurance insures the owner of the vehicle in the case of accidents and other events, including theft. With comprehensive coverage, it doesn't matter whose fault an accident is; the insurance company will cover the damages, even if the other driver is uninsured. And if a vehicle is totaled or stolen, the insurance company will usually cover between 80 percent and 100 percent of the value of the vehicle.
Other auto insurance packages cover accidents involving a third party, fire, and theft. These middle-of-the-road plans are not quite as extensive as comprehensive insurance so they are is usually much cheaper. The insurance company will pay for damages caused by fire and theft, but they will only cover an accident with another car if you are the one at fault; however, if you are in accident that doesn't involve another car, you will have to pay for any expenses out of pocket. This type of coverage also does not cover against those who are uninsured.
Liability insurance is the most basic type of auto insurance that is required in every state by law. Sometimes called third-party insurance, liability auto insurance covers the expenses of damages to another car that occur in an accident with another vehicle, if that accident is your fault. All other damages and accidents are not covered by the insurance policy. Liability is the cheapest type of insurance a person can buy and is usually purchased by drivers whose cars have little intrinsic value.
There are a few other types of auto insurance, but these are the three most common coverage plans. Which plan you should choose depends on the value of your vehicle and whether or not your vehicle is leased. For those with financed vehicles, the lender almost always requires the car owner to have comprehensive coverage. However, those who have high-value vehicles may also choose to have a comprehensive plan. Drivers with vehicles that are less valuable, on the other hand, usually opt for a cheaper plan because its lower cost better matches the worth of the automobile. But no matter what auto insurance plan people choose, the right coverage can help pay for expenses caused by an accident and provide drivers with peace of mind.
by: Art Gib
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