Insurance is the financial protection provided by the insurer (the person or a company which gives insurance) to the insured (the person who receives insurance) against any damages or unexpected losses. While a car insurance offers financial protection against losses occurred to the car due to any road accident or theft or due to natural or man-made disasters. This is like reimbursement provided for the vehicle which would help the insured to bear with the losses without any burden. The car insurance is mandatory in most of the countries and many car companies have tie-ups with the insurance companies to assist their customers in taking up indemnity.

There is also a  “Third party insurance” which covers the person other than the two parties involved(insurer and the insured).In case of car insurance, “driver” would be the third party while car owner and the company that provided insurance are the other two parties. It would offer a great benefit not only for third party but also for the insured (car owner) if the third party insurance is taken up because it would compensate the car owner legally in case of death of the third party or his disability although he is not involved in this type of insurance.

A person must be careful in choosing the right and authentic car insurance schemes. The amount one can get as compensation depends on the policy that he/she have chosen which gives him a good deal and the type of car that he purchased. One must maintain sufficient credit so that he can get enough in case of car indemnity. Being aware of the scam alerts is also important.

Albeit the benefits of insurance, a major disadvantage with the car insurance is that you may end up not receiving any amount that you have paid as a premium every month if any damage does not occur. So this could be a burning hole in one’s pocket.

It is therefore mandatory to thoroughly go through the rules and regulations before anyone opts for auto or car insurance and choose only the well-rated ones.