At the most basic level, auto insurance is simply a contract between you (the first party) and your car insurance company (the second party). The third party to this contract has not come into the picture yet, because he or she is probably somebody you have not met yet. That would be the other guy or gal involved in a car accident.

Liability Insurance

No matter how carefully you drive, over your driving last, you will probably have an accident. Even a minor car accident can cause thousands of dollars worth of property damage. And again, no matter how carefully you drive, there is a good chance that you will have a car accident that is your fault.

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