Auto insurance, which often goes by several other names, is a type of insurance that is purchased by drivers of automobiles for protection in case of an accident or other form of peril. This type of insurance may be purchased for a large number of automobiles, including cars ands trucks. If an accident takes place, the insured person would receive coverage for the monetary damage of the accident according to the terms of their policy. In exchange for this coverage, the insured person pays into their policy in regular, usually monthly payments called premiums. The amount of this premium largely depends on the type of auto insurance, that is, the components of their policy. Usually, each insurance policy includes, at the lowest and cheapest level, a type of coverage known as liability. Liability insurance covers financial liability that is placed upon the insured for bodily injury or damage against a third party. On top of liability auto insurance, which is the minimum requirement in many states, the insured may also invest into collision, comprehensive, or other types of auto insurance.