Car insurance - what is this?

What is a car insurance?

Car insurance is a contract with an insurance company that can protect you against severe financial loss if you are ever in an auto accident. Varying types of coverage act as a bumper? against various accident-related expenses, like liability, medical costs, damage to vehicles, and property damage.

The basic car insurance coverages:

1. bodily injury liability, which provides coverage for bodily injury claims from the people you might injure in an accident

2. property damage liability, which covers any property damages to third parties -- such as another person's car you damage -- which you cause or are responsible for

3. medical payments to the policy owner and other passengers in the policy owners car

4. uninsured and underinsured motorist coverage, which protects you when the negligent driver has no insurance or insufficient insurance (in most states, this covers only bodily injury losses -- though some states also include property damage losses)

5. physical damage covers damage to your car

a. collision, which covers losses to your car when you are involved in a collision

b. comprehensive, which covers most non-collision physical damage to your car (if your car is damaged in a storm, or a windshield breaks, for example).