Auto insurance consumers have many types of coverage to choose from, so it is important to understand what is available. Some states require liability auto insurance coverage to ensure that its drivers can cover the cost of automobile accidents.

Liability auto insurance covers claims against the policy holder and other operators of the insured vehicles, provided they do not live at the same address as the policy holder. For those living at the same address, they must specifically be covered on the insurance policy. When a family member comes of driving age they must be added to the insurance policy. Some insurance policies will not provide liability insurance any vehicles other than what is covered in the insurance policy. When you drive a vehicle owned by another party, you are covered under that party's policy, unless you live at the same address, and you are not on the policy. You can also purchase a non-owner's policy which will cover you on any vehicle that you drive.

Most auto insurance policies provide liability coverage for rental cars. Full coverage or comprehensive auto insurance policies usually cover the rental car also. Full coverage premiums are based on many factors including the value of the insured's vehicle. Full auto insurance coverage cannot apply to rental cars because the insurance company does not want to assume responsibility for a claim greater than the value of the insured's car, as the rental car may be worth more than the insured's vehicle. Rental car companies offer insurance but this is typically not necessary as credit card companies, such as American Express, Visa and MasterCard, provide auto insurance to coverage for the rental cars when you use their cards.

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