Automobile Insurance

Car insurance is an absolute necessity for anyone who drives a car. Even ignoring the fact that some types of car insurance are mandated by law, coverage is essential: the potential costs surrounding an accident -- whether they be repair/replacement costs of the cars or other property, or medical costs of the victims -- are simply too huge to run the risk of being without adequate coverage.

Car insurance policies can be divided into two distinct categories: third-party liability and first-party insurance. In car insurance terminology, the owner of the policy is the first party, who has contracted with the second party (the insurer) for the coverage. The third-party is the other person(s) in the accident, or the person(s) whose property the policy-owner damaged. Thus, in general, third-party liability insurance covers the damages to other people that are attributable to the policy-owner. First-party insurance covers damages that are done to the policy-owner or his passengers.

At least some amount of third-party liability coverage is required by law in most states; for the most part, first-party coverage is not. However, car insurance is not the place to save money by cutting corners; a single accident could easily wipe out someone's life savings, whether they're at fault or not. Also, price isn't everything... if the insurance company balks at every claim, low premiums are meaningless.