There are two main types of auto insurance. They are:
Full Coverage Auto Insurance
In the event of an accident, full coverage auto insurance will protect the car and any other cars or property damaged. Normally, finance companies stipulate that any of their clients that have car loans must insure their cars fully. This protects the bank, as the car is theirs until the loan is paid off by the owner.
Third Party Auto Insurance
Third party or liability auto insurance will only protect another party in the event of an accident. So if a car with third party auto insurance hits another car, the other car's damages, and perhaps even the expenses incurred from loss of use, would be paid by the offender's third party insurance. However, any damage to his/her own car would have to be borne by the car owner. Naturally, this is less expensive than full coverage, as it carries far less risk.
There are six main types of coverage that can be included in a car insurance policy. They are:
Comprehensive coverage, as the name implies, means that no matter what happens to your car, you are covered. This includes theft, fire, and damage caused by extreme weather such as storms, floods, snow or even lightening. If you face the elements daily - or live in a dangerous neighbourhood - then this type of coverage is for you.
Drivers Uninsured or Drivers Underinsured
This type of coverage will protect you and your passengers in the case of an accident caused by another driver, regardless of their insurance status. Without this coverage, you may still end up paying the costs of repair even if the accident was not your fault, simply because the other driver didn't have any insurance, or their policy did not cover third party damages. With this coverage, you needn't worry.
Personal Injury Protection (PIP) Medical Coverage
A lot of drivers focus on insurance for their vehicles, forgetting that serious accidents can send drivers and passengers to hospital, leading to medical bills and loss of income. PIP policies will cover these costs, and can even extend to funeral costs.
And it doesn't stop with cars and passengers. Third party property can be damaged, for instance parked vehicles, buildings and gardens. This type of coverage can be used to offset costs accrued with damage to property
Bodily Injury Liability
This coverage will cover the medical bills for injuries incurred by other drivers, passengers or bystanders in the case of an accident. Don't forget that healthcare costs are the largest source of in the US - and don't add to that statistic by ensuring you are covered!