Car insurance is viewed by most car owners as a necessary evil; they know they have to have it, but they pray they'll never need it. Auto insurance comes in several forms, and is offered by any number of companies. In some states, even banks are getting into the auto insurance game. It is quite possible to overinsure your car. Knowing what is available and choosing the best coverage for your needs can save you several hundred dollars each year.

The most common type of insurance is liability. Liability insurance covers the other party if you should be responsible for the damage. Coincidental with liability is property damage, which covers the other person's personal property, such as a mailbox or section of fence, if you damage it with your car. Most states require car owners to have liability insurance, usually for a minimum amount (such as $50,000), before they can register their car. With the expense of cars these days, and the propensity of injured, or even potentially injured, parties to sue, liability insurance of as much as $1,000,000 may not be a bad idea, and it doesn't really cost that much more than minimum value coverage.

If you want to protect your own car, you need to look for comprehensive and collision insurance. Comprehensive covers any incidental damage to your car, such as vandalism, windshield or other glass damage, or theft from your parked car. This insurance usually has a deductible, meaning that it will pay for the damage above an agreed-upon amount, such as $100. Most insurance companies will go as low as zero deductible; that is, they will pick up the full cost of repairing the damage. The higher you set your deductible,however the cheaper this insurance will be.

Other options, or riders, that you can get on your auto insurance include such things as uninsured motorist, medical expense, and towing coverage. Some states require uninsured motorist coverage, covering your costs in the event your car is damaged by someone who doesn't have insurance. Medical expense coverage will pay for injuries you, or passengers in your car, sustain in an accident, up to the limit of your coverage. Towing coverage will, as the term suggests, pay for towing expenses should your car need one, whether in an accident or not. The best way to be sure that you get the type of coverage that's best for your needs is to talk to a knowledgable agent.

Many states have adopted so-called "no-fault" insurance regulations (you settle with your own company, regardless of who is at fault in an accident). These types of policies are supposed to reduce premiums by reducing the number of lawsuits between the people involved in accidents, but the final decision on the effectiveness of these plans is still out.

Many people believe that insurance rates are set by the state and are the same, regardless of the insurance company. This is not the case. Although the states regulate rates, each company is free to set its own premiums. These vary, even within a company based on such things as your age, driving record, and where you live. By shopping around and comparing rates for various coverages, you could realize substantial savings while improving your coverage between the most expensive and least expensive company.

Premiums are not the only factor you should use in judging an insurance company; you should also consider the quality of service you receive as well. A low premium will not be of much comfort if you can't get a claim settled when you need to.