Car Insurance – The Different Types of Auto Insurance

by CarInsurance.com Staff Writer on October 26, 2010

Depending on what state you drive in, there will be different mandatory requirements for the specific car insurance policy that you will need to purchase. Within those parameters, however, there will be some room for you to choose your own coverage. That is why it’s essential to learn a little bit more about the various plans that are out there, to find the cheap car insurance that will still keep you covered and safe. The most common type of insurance policy out there is fully comprehensive auto insurance, which just as it sounds, offers full coverage.

This fully comprehensive car insurance may also be the most expensive, but it will certainly insure your car against any type of harmful event. That ranges from accidents with other cars, to vandalism and theft. If considering this type of insurance policy, bear in mind that it may not cover the entire value of your car, so be sure to read the fine print before you pay for this costly option. There are cheap car insurance policies that might cover almost as much, but at a far lower premium, so that is something to consider before signing up for comprehensive coverage.

For the most basic car insurance, by contrast, you could sign up for third party insurance, or personal liability coverage. This type of plan helps pay for the damages if you get in an accident with another car, are at fault, and have to pay for medical bills or damages to their vehicle. While this is the cheapest type of car insurance, it will not cover the damages to your own car, and so is only really recommended if you are driving an older vehicle that has little value to it. That way, you can pay for the damages and then just purchase a new car yourself if it is totaled.

A middle option exists for those who want a little bit more coverage than the third party insurance but aren’t willing to shell out for full comprehensive and collision. This happy medium of car insurance is third party, fire & theft, which covers the catastrophic events of your car being stolen or totaled. However, it will not cover instances in which you get in an accident, are not at fault, and the other person’s insurance coverage doesn’t cover the damages to your car. For that reason, it’s not recommended for those who drive brand new vehicles.

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