It is better to know what exactly car insurance is before getting into the nitty- gritty of it. Car insurance is a contract between owner and Insurance Company that affords protection against financial loss in case of theft or accident in exchange to money one pays as a premium. Premiums depend on the coverage, location of use and storage ECT. Each state in the country has its own insurance requirements. The common thread running through the concept of car insurance is that it should provide one with financial protection in the event of theft or accident. This is the barest minimum and one should know available options, what each offer is covering and how insurance works.

Car insurance is priced differently depending on the customer’s requirement The basic policy covers only depreciated cost of the car in case of theft or cost of damages caused to the car. This comes under property liability. Next is a legal liability, which is the owner’s legal responsibility to others for bodily injuries, property losses or damages irrespective of who was driving at the time of the accident. The third, medical expenses are the cost of treating the injuries, rehabilitation and sometimes loss of wages and funeral expenses.

A motor vehicle owner pays the insurance company a monthly sum of money, the car insurance premium. The premium is determined, by a variety of factors like the coverage, type of vehicle, the age and gender of the driver, driving history and the place where the vehicle is stored and driven primarily. Car insurance companies usually give a rebate on credit points based on these factors. They issue an insurance card for each type of coverage and the owner is to carry it in the car all the time. States are changing their laws with the changing times and the electronic version of these cards as evidence of insurance is enough.

The entire business is under private enterprise and there is intense competition. This results in a plethora of policies that offer various facilities that cover practically all the requirements of owners at an additional premium. All policy has conditions of validity too. Some of the more common policies with optional features are mentioned.

Collision policy reimburses the cost of damages to one’s own car resulting from a collision with another vehicle or object when it is the owners’ fault. Though it does not cover normal wear and tear and mechanical failure it pays for damages caused by potholes and the car rolling over. Comprehensive provides cover for theft, fire, arson, natural calamities, even asteroid hits and any other incidence other than collision. Glass coverage covers windshield damages, which proves helpful for the car owner. Some policies include no-deductible glass coverage which covers all glass damages including glass sunroofs.

The collision and comprehensive policies pay only the market value of the car. These insurances are tied to the car. Others like liability, non-owner are tied to the individual as a driver. In many cases, there may be a gap between what was paid for and what one would get from insurance. The gap between the two can also be covered by Gap insurance.

There are some insurance that covers most of the damages. You can opt for any as per your requirements. Having car insurance is of utmost importance as it helps you get everything covered in case of any unforeseen accidents or damages.