What is Auto Insurance? For anyone looking to buy a car, searching for the right auto insurance is an important part of the process. Auto insurance is so vital that every state requires some form of insurance by law. In today's world, insurance isn't just a throwaway bill that we pay every month--it's an investment that can relieve us of a massive financial burden in the case of an accident. But what is auto insurance, and what kind of coverage can we buy when we look for the right package? For more information on what auto insurance covers, visit this site.When you buy insurance, you're buying a contract between yourself and the insurance company. You agree to pay the premium defined in your contract. A premium is the charge that you pay the company each month, like a utility bill. In return, the insurance company agrees to cover your losses if they fall within the situations outlined in your contract. This means that if your car gets stolen or you get into an accident, you won't be forced to cover the charges out-of-pocket--your insurance company will cover the damages in your contract. No one expects to get an accident or be the victim of a theft, but it does happen, and insurance can relieve you of the financial burden in that instance.Auto insurance typically consists of a few different components. When people think of buying car insurance, they typically think about car accidents. This is where property damage coverage comes in. In the event of a car accident, it covers property damage that you would be held responsible for--other people's vehicles, houses, fences, etc. To cover the cost of damage to your own vehicle, look into buying collision coverage. All states require drivers to carry property damage insurance. Without insurance, you'd be left covering the cost of damages yourself--and that can easily skyrocket into thousands of dollars.Liability coverage is another important component of auto insurance. If you're responsible for a car accident, liability insurance covers the injured party's medical bills up to a certain point (depending on your amount of coverage.) Likewise, you can buy personal injury protection coverage that takes care of your own medical bills. Again, considering the enormous cost of medical bills, this insurance payout relieves you of a lot of financial stress. Like property damage coverage, it's required in every state.A form of coverage that's less known but equally vital is uninsured motorist coverage. Despite state laws, many drivers do not have insurance. If you get into an accident with one of them, they won't have property damage coverage to cover your repair costs or medical bills. Depending on your own coverage, you might be forced to pay these expenses yourself. For this reason, most insurance companies offer uninsured motorist coverage to cover damage in this case. It might seem unlikely, but uninsured drivers are more common than you'd think, and an accident with one of them could result in massive amounts of debt.Theft insurance is typically offered as part of a comprehensive insurance package. Comprehensive coverage is optional, but a vital part of any insurance package. This coverage takes care of loss due to theft, as well as weather damage, vandalism, and other incidents. A direct collision isn't the only incident that could cause damage to your car. Hail, tornadoes, vandals, even a deer jumping out in front of your car--all of these could cause severe damage resulting in a hefty bill.When you speak with an insurance provider, talk about the different types of coverage available. Your provider can give you the options and help you choose what kind of package is right for you. More options means a higher premium, but it also means better coverage. Whatever you choose, make sure you're protected on the road. Financial security is one of your most important assets.