Auto insurance, also known as vehicle insurance, car insurance, or motor insurance, as the name suggests provides compensation against losses that may arise in case of motor accidents or any liability in such accidents. You need to take a package of different covers that together form a policy. When buying auto insurance, remember that you are not only buying protection for damage to your vehicles, but potential financial liability you may have to pay others for the damages caused by your vehicle.

Motor insurance takes care of your financial loss in case of an accident. This insurance is a contract between the insured, who agrees to pay the premium, and the insurance company or the insurer who agrees to bear the losses in case of an accident or theft of a car, according to the policy.

It provides property, liability, and medical coverage. Let's learn about each of these covers.

- In the property coverage, you can claim losses against damage to the body of the car. It is also helpful in case your car is stolen, although that depends on the kind of auto insurance you opted for!

- Liability coverage also known as third party coverage is helpful in case you cause medical injury or hit the car of another person. It takes care of the cost that arises in such circumstances.

- The last coverage is the medical coverage, where you can claim the medical bills arising due to injuries in an accident. This insurance policy helps you claim rehabilitation expenses, the wages lost due to an accident or funeral expenses.

Apart from these benefits, an automobile insurance policy also protects you from:

- The cost of lawsuits, including legal fees that you may have to face due to the accident

- The cost of getting the vehicle repaired because of the accident

- Cost of repairing the vehicle caused by natural or artificial calamities, such as flood or vandalism

An auto insurance policy is valid over a period of 6 months to a year, after which it needs to be renewed. You can receive a notice by mail from your insurance company for renewal or payment of premium.

An insurance policy covers six different types of situations. You need to pay a separate price for each. Most states require you to take a few of these. Similarly, the finance company from which you are getting the finance done may also require you to buy some of these. These covers are bodily injury liability cover, personal injury protection or PIP cover, property damage liability cover, collision, comprehensive cover, or Uninsured and Underinsured Motorist Coverage.

When buying insurance cover, remember to:

- Buy the most suitable cover. If possible, you can even invest in a combination of covers.

- Protect yourself well by investing a greater amount than required by state

- Get the highest deductible amount that you can easily pay