Car insurance may seem like one of the most complex and complicated things to grasp.

Like many other insurance schemes, car insurance consists of three basic types:

- third party

- third party fire and theft

- comprehensive insurance

To explain these three types of insurance schemes, we will delve into the following three scenarios. These scenarios will give you a fair understanding of how the three types of car insurance schemes work and what to expect with each. Note that in the car insurance scenarios that follow, there will be three parties involved in all. The first will be you, as you are the one buying car insurance. The second will be your car insurance company, which will be covering you in case you meet with an accident that damages your car. The third party involved, will be the person/persons who are involved in the accident.

Car insurance basic scenario #1 - Third party car insurance

Let us assume that you are involved in an automobile accident. There will be damages to both your car as well as to the other person’s car. Third party insurance in simple words will pay for the third party involved, in this case the other persons car. As this is the cheapest form of insurance, it will offer you the least amount of cover. This means your insurance company will pay for the damages only for the other vehicle involved, not your own. Also this form of insurance will not allow you to safeguard your vehicle against theft or other such contingencies. Almost all vehicles on the road today are bound to have this form of car insurance, given that it is the cheapest.

Car insurance basic scenario #2 – Third party fire and theft insurance

If you meet with an accident, there will be damages to your car and the other person (third party’s) car as well. In such an event the insurance company will pay the damages incurred to you as well as the third person. In addition, a third party fire and theft insurance will cover your car in the event of theft as well as fire.

It is a form of car insurance that is preferred over regular third party insurance as they are marginally more expensive compared to third party insurance. People prefer buying them because they get the added advantage of extra cover for a little more they pay.

Car insurance basic scenario #3 – Comprehensive car insurance

In this scenario, the kind of insurance cover this type of car insurance will offer you is unbelievable. In this case, the insurance company will pay not only for your cars damages, and the damages to the other car, it will also pay on a number of other things, and under a number of different circumstances. For example, if you are the one responsible for the crash, it will still pay. Even if it is the fault of the other party involved and if it does not have insurance, your insurance company will still pay. Infact this kind of insurance is extremely helpful in hit and run cases. Some people even get their audio systems and speakers in their cars insured. However the price is the catch here. The price of such policies is a lot higher than regular car insurance schemes.

So the best thing to do when you chose car insurance is to think through what would suit your situation best. If you are still in doubt about car insurance, it is best to read more about the nuances and other factors involved in car insurance, or better still, you could consult an expert.