What is Car insurance

Auto insurance is an insurance contract between an insurer and a driver. This covers the risks generated by driving and the possibility of causing accidents.

Motor insurance is compulsory in almost all countries as long as the modality required by the State is the basic modality.

This basic modality covers the civil liability of the owner and driver of the vehicle, causing damage to third parties. However, the insurance may include extended terms, where the perils covered include the risk of accident without damage to third parties, as well as another series of voluntary top-ups which broaden the insurance coverage range.

Depending on the country to which we refer, this obligation that we have mentioned may or may not be the case.Types of car insurance

Among the types of car insurance, it should be noted that there are many types. In other words, there are many types of car insurance.

These types vary in the coverage they offer and the risks they cover.

Therefore, among the types of car insurance that exist, it is worth highlighting the following:

• Third party insurance : This is the most basic. It is limited to covering civil liability. This is what the state demands.
• Extended liability insurance : This is insurance like the previous one, but it has additional advantages. In this sense, covers such as windows, crane in case of breakdown, among others.
• All risks : This is the most complete of all. Coverage is responsible for ensuring that all damage to the vehicle is covered; including theft.
• With deductible : This is a similar all-risk insurance. However, this insurance implements additional payments for the provision of certain services in the repair of the car.

Car insurance coverage

As we said, auto insurance has no terms but is coverage based. In other words, the modalities that are established are set according to the coverage that said modality offers.

Therefore, depending on whether or not the insurance offers greater coverage, the cost of insurance (the premium) will be higher or lower.

Depending on the coverage, it can be highlighted that there are three main types of coverage:

• Liability Cover : This focuses only on third party damage cover.
• Limited coverage : This covers all of the above with the addition of a few situations such as theft of the vehicle or the front window in the event of a breakage.
• Extended coverage : This is the widest coverage. It covers almost everything that happens to the vehicle, whether the accident was caused by third parties or by the driver.

The Insurance Compensation Consortium

The Insurance Compensation Consortium is an institution owned by the Spanish government. This institution is created to cover all disasters caused either by a natural disaster or by the bad condition of the road. Or, on the contrary, an accident with a person who does not have insurance and who must cover the damage.

A percentage funds the Insurance Compensation Consortium it receives from all insurance carried out in the country. All must pay, directly, a small percentage to the said institution. All this to have resources later when it comes to having to cover the damage caused by situations such as those mentioned above.