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Types of Auto Insurance

Statistically speaking, 13 accidents involving automobiles take place every second on this planet. By the time you have finished reading the above sentence, another 39 must have taken place. One can never be sure which second would involve them getting into one too and it is enough to form the basis of why auto insurance becomes a necessity. The importance of this insurance policy is so that it has been made mandatory against every car owned and running on the street.

The auto insurance comes in two types. The first one, which is mandatory and a must according to law is to preserve the interests of the public by making sure that the driver of the car is financial secure enough to pay for the damages and the injuries sustained by the victim’s car and the victim alike. This kind of insurance does not pay for the damages incurred by the insurer and only covers the victim’s expenses.


The minimum value of this insurance policy is assigned by the government and differs from place to place. The amount is different for property damage and injury to a person. The premium amount depends upon the amount of the insurance policy by keeping into account the experience of the driver along with his / her age and gender. Other things taken into account are the past records and the kind of car being driven.

The second type of auto insurance covers the expenses of the wrong doer along with the damages to the victim. This kind of insurance is an advance form of the 1st type and is beneficial for those who drive expensive cars whose repairs can be pretty harsh to their pockets. The premium of this kind of policy is of course higher comparatively as it involves a coverage which is bigger in diameter.

The amount of this insurance can be decided by the owner of the policy along with the specifications required. The policy amount can be decided on whether the parts damaged due to the accident are repaired or replaced completely. These are the two difference sub categorizations of auto insurance policy of the second type. Generally the person buying this insurance sets the amount keeping in mind the past driving records and also keeping into account the expenses that might have to be incurred in case their car hits something.

There are a lot of insurance companies providing car insurance to the people in their region, and quite a few offer a instant auto insurance quote to their prospects including the ever so popular Farmers’ auto car insurance quote system. The high numbers of them facilitates the people to get the insurance for a lesser amount due to competition. The terms and conditions of the policy differ from one insurance agency to the other and it is best to understand the concept beforehand in order to select the one which best suits your purpose. While buying a car, ask the dealer for any recommendations as they have tie ups with different agencies and can help you get insurance at a much cheaper rate.

Remember that one cannot avoid auto insurance as it is illegal to drive without one and the failure of abiding by it can lead to cancellation of the license.

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