Auto Insurance

Auto insurance is one of the very commonly used types of insurance. The other terms used for it are motor insurance, vehicle insurance and car insurance. In exchange of a premium, auto insurance will pay for any damages and liability incurred as a result of a road accident. It is planned in a way to protect vehicle owners from any financial loss due to an accident.
Auto Insurance is a legal agreement between the policy holder and the insurance company. All the terms and conditions are listed in the agreement. Depending on that policy holder needs to pay certain premium and the insurance company then covers the risk of an accident or car theft. There are basically six different types of coverage available. Some of these are required by law, while others are optional. They are:

Liability for Physical damage: This is for any physical damage the policyholder may causes to anybody else.
Personal Injury Protection (PIP) or Medical Payments: Under this the driver and the passengers of the policyholder's car get the treatment.
Liability for Property Damage: This is for the damage the policyholder might cause to someone else's property.
Collision: This pays for the damage to the policyholder's car as a result of a collision.
Comprehensive: It pays for any damage to the policyholder's car due to any reason other than collision with another vehicle, which includes damage due to fire, explosions, earthquakes, floods, riots and theft.
Uninsured motorist's coverage: It is for costs due to an accident involving a hit-and-run driver or a driver without insurance.
Depending on the cost of likelihood of accidents, theft and miscellaneous losses; an insurance company charges a premium for the insurance coverage. Premium may significantly differ from one company to another.