What are the Major Categories of Auto Insurance

Auto insurance is used throughout the world, and can be split up into a number of separate categories and configurations. The major categories of auto insurance, also known as car insurance or vehicle insurance, are based on the specific items that they provide coverage for. For example, some basic policies may only cover third parties, while other more comprehensive contracts will cover personal property, fire and theft, and other things like weather damage and protection in the case of vandalism. More extensive auto insurance policies obviously command higher premium prices when compared to basic third party coverage.

The first distinction with auto insurance contracts can be made according to whether such policies are mandatory or not. Basic third party personal and third party property insurance is mandatory in many jurisdictions, where it is a legal requirement before people can drive on public roads. In contrast, it is voluntary whether people decide to insure their own person and property, in the form of collision or comprehensive insurance products. The most basic category of auto insurance is third party insurance, which is often linked with vehicle registration and taxation schemes.

Other categories of insurance fall under the term full cover, although there are a number of explanations as to what the term full means. The most basic form of full cover insurance is known as collision insurance, and simply covers policy owners and their vehicles in the case of road accidents. Both personal property and medical bills are insured in these policies, but only for damage and loss related to a traffic accident. The next form of full cover car insurance is known as comprehensive car insurance, where different insurance companies stipulate a number of different items and situations where protection is provided.

While the details of comprehensive policies do differ from contract to contract and jurisdiction to jurisdiction, most policies include coverage for fire and theft, vandalism, weather, attempted theft, and impacts with animals, along with full collision and third party coverage. Car insurance is important for millions of people around the world, many of whom are not being covered in situations where they thought they were. It is important to read the find print of any car insurance policy, and get the right product for your needs and your budget.