Car insurance is basically a contract between a client and an insurance company. The insurance provider agrees to pay the client the losses defined in the policy, in exchange for the premium paid by the client.
Car insurance offers third-party liability coverage on property and life. This implies that if a third party incurs a loss in an automobile accident caused by the insured automobile, the automobile insurance company will defray the expenses.
Some policies also offer medical coverage, either in the form of additional clauses or as a built-in aspect of insurance coverage. Medical coverage pays predominantly for the cost of treating injuries, compensation for lost wages, rehabilitation expenses and funeral costs.
Coverage under an automobile insurance policy also includes vehicle damage or theft.