Prior to buying car insurance, one should know everything about car insurance. Car insurance is a financial product and at the same time, a contract between car owners and car insurance companies which provides financial protection against theft or an accident in lieu of a sum of money that is paid to the insurance company as premium. This is the very minimum requirement. The premium paid depends on many factors. Each state has own insurance laws. A common thread running through these laws that vehicle drivers should have some protection against financial losses from accidents can be perceived. One should also know the various options in coverage and how the insurance process works. The basic policy gives compensation which is inadequate and hence one should know what additional coverage is needed to meet individual requirements.

The car owner pays the insurance company a basic premium with additional premiums for each one of additional coverage one has chosen. There are choices on payment mode and frequency. The premiums depend on many factors like the coverage, the place of usage and storage, age and driving history of the owner. Depending on these and other factors like training in advance driving, discounts in the premiums are given by car insurance companies. An insurance card specific to the coverage is issued, to be available in the car all the time. Laws are changing to suit the changing times and an electronic copy of the card is acceptable nowadays in many states.

The basic policy covers property liability which is the depreciated or market value for the loss of the vehicle in theft or cost of repairs of the damages of the owners’ cars. The legal liability is what you owe the victim for the injuries, its treatment and loss or damages of property caused irrespective of the driver. Third liability is the medical expenses, including rehabilitation, and sometimes loss of wages and funeral expenses.

Competition among private enterprises is intense. There is an abundance of policies are in the market to suit the varying needs of owners. This comes with an additional cost. All policies have conditions of applicability and validity. Some of the common policies which go not much beyond the minimum are mentioned.

A comprehensive policy covers for fire, arson, theft, natural calamities including asteroid hit and other incidents other than collision. The collision policy reimburses the cost of damages to the owner’s car resulting from a collision with another car or objects caused by one’s self fault. Besides, it covers damages due to potholes and rolling over though not normal wear and tear and mechanical failures.

Glass coverage covers damages of the windshield which is common. Policies having nondeductible glass coverage cover even sunroof glass.

More sophisticated policies are available in the market which can you can choose according to your needs and requirements.