What is auto insurance? In case of an accident, this kind of insurance protects you against any financial loss. Basically it is the contract between you and the insurance company. An ideal insurance policy covers six various kinds of aspects. There are numerous companies that offer such insurances. Therefore it is a wise idea to compare these insurance policies of these companies before coming to a conclusion. Most of the auto car insurances are for a period of 6 months to a year.

There are four main types of auto insurance policies:
• Fully comprehensive auto insurance
• Third party, fire and theft
• Third party insurance
• Specialized car insurance

If we compare auto insurance of all the 4 types mentioned here, we will find some major differences. The fully comprehensive auto insurance is the most expensive as compared to the other insurances. It insures the owner of the car against occurrences like accident and theft. It is usually taken by the people who have bought a new car.

The third party, fire and theft car insurance is popular amongst the people whose cars are not so new. In this insurance, fire and theft are covered but in an event of accident the insurance company is liable to pay if the fault is that of the car owner and not if the other car owner is at fault.

The third party insurance involves incidents where you are at fault in an event of an accident. This car insurance is taken by the car owners whose cars are old and have little worth.

The specialized car insurance covers a car that is over 25 years old. These cars can be counted as 'classic' cars and have all the gains that a classic car insurance can have. However, be careful to check with your company, the number of miles you can drive this car per year.

Thus before finalizing, you must compare auto insurance policies that best suits your car.