The decision to purchase a car is one where research is conducted and opinions are sought from automotive experts and experienced acquaintances. Buyers make an effort to understand all the aspects of purchasing a car and base their decision on numerous factors. In a similar manner, it is important to know the facts about automotive insurance.
An automotive insurance policy is a legal agreement between the insurer and the insured by which the insurer underwrites (or funds) the vehicle against certain risks pertaining to it, in return of a regular fee (premium) from the insured. The premium varies depending on the type of insurance policy a car owner avails of. The most common types of auto insurance policies are as follows:
Third party automotive insurance: It is also known as liability auto insurance policy. This policy bears the cost of repairs of physical damage to another person’s vehicle or property by the insured person. It also covers the car owner against the liability he has towards people injured in an accident involving his car. With this policy, the car owner also does not have to worry about the legal liability arising from the accident over compensation for damage and injury.
