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The Basics of Auto Insurance

Auto insurance is financial coverage of an motor that protects the driver from having to pay out of pocket for any damages caused by traffic accident, theft, or other vehicle damage. Car insurance is the law in the United States. It is purchased for all motor vehicles including cars, trucks, and motercyles. The driver pays a monthly payment called a "premium". This premium goes to the auto insurance company and they agree to cover the expenses that could be incurred in a traffic accident. This money is used to pay for the damage to the insured vehicle, the proper that is damaged in the accident, and the other vehicle damaged as well.

The amount you pay for premiums really depends in the state you live in and their particular requirements. Some states may not even allow you to get a license without proof of insurance. It's important to do research about what your particular state requires.

Auto insurance is broken down into several levels and types. We will discuss four of them.

One type of auto insurance is "liability" coverage. Liability is the most basic type of auto insurance and required in all auto insurance. Liability coverage only pays for the physical injury, property or vehicle damage that the driver is directly responsible for.

Another type of auto insurance is "collision". Collision covers all damage directly relationed to an auto accident. This includes the vehicle itself, and/or physical injury of the driver or passengers as a result of the accident.

"Comprehensive" coverage is financial coverage of motor vehicles in case of damage caused by incidents other than a traffic accident. That includes fire, theft, vandalism, and in some cases, weather damage.

"Full Coverage" is the combination of liability, comprehensive, and coverage.

There are several other types of auto insurance as well. It's important to do lots of reasearch and be familiar with the insurance laws in your particular state.

As with most auto insurance, you gernally have to pay what is call a "deductible". A deductible is a set, agreed upon amount you have to pay before your insurance coverage kicks in the case of an accident.

Generally, the insurance rate of males is higher than that of females. That's because statistically, there are more males involved in accidents than females. As with any decision, always do your research and become familiar with the laws in your state. Happy driving!