Car insurance provides financial cover against damage caused to an insured automobile that occurs due to an accident, fire or theft. It also covers financial liability against damage caused to another person's property in the event of an accident. Car insurance can cover the insured party, the insured vehicle, as well as third parties.

The insurance premium can be mandated either by the government or by the insurance company. The limit of compensation would vary from country to country, certainly no payment will be made on drunk drivers and unauthorized drivers. The title says it's comprehensive but takes note it is a misnomer because it does not cover everything.

It has its own car insurance exclusions and limitations which will be discussed hereafter. If you drive a car then you must have the minimum of insurance protection which includes Personal Injury Protection and Uninsured or Under Insured Motorist Coverage. If you do not have at least the minimum then under the law you will be unable to get your car registered.

The mandatory insurance coverage in different countries includes:

• Vehicle features/ characteristics
• Nature of the selected coverage
• Profile of the driver (like age, gender, driving history, etc.)

The first type mentioned in the list- the bodily injury liability coverage. This type of coverage pays for injuries in the event that a policyholder is involved in an accident and there are damages or injuries to a third party. This type of coverage compensates for a variety of things. These include lost income, medical expenses, pain and suffering and the legal costs associated with a lawsuit if one is instigated by the third party.

Types of Coverage Provided by the Car Insurance Companies

The car insurance companies provide different sort of coverage or protection to the customers which are as follows:

• Liability insurance
• Collision coverage
• Comprehensive coverage
• Uninsured/Underinsured
• Loss of Use coverage
• Car towing coverage