Importance of Car Insurance

Having car insurance is not only legally required, but it provides a financial safety net for you and your family if you are involved in an accident. Nobody likes paying for insurance but the benefits greatly outweigh the cost of premiums.

Obeying the Law

Your state of residency determines the minimum amount of insurance you must maintain to legally drive. This includes the type of insurance, usually basic liability, as well as the amount which should be sufficient to cover most of the costs incurred if you cause a car accident.

Most states have stiff penalties for drivers who violate insurance requirement laws. If you get pulled over, regardless of the reason, you will be asked to provide proof of insurance. Some jurisdictions allow authorities to impound your vehicle on the spot if you are unable to produce that proof. You risk losing your driving privileges by not having auto insurance. You will likely be fined either way.

Asset Protection

Insurance can protect you financially if you are involved in an accident. Rather than you being solely responsible for medical expenses or car repairs, your insurance company helps pay those costs for you. Without insurance, you would be liable for those expenses which means your personal assets are at risk. Liability coverage protects you from having your assets taken to pay costs associated with a car accident you cause. If you do not have sufficient insurance coverage, you may still be at risk.

Personal Protection

If you are hit by an uninsured driver, without insurance you are responsible for your own expenses. Of course, you can always sue the other driver, but this takes time and money without a guarantee of a decision in your favor.

You may be able to use your personal health care insurance to pay for medical expenses. However, if you indicate your injuries are a result of a car accident, your health care insurance provider may be unwilling to cover those expenses or require you to seek reimbursement from the party that caused your injuries. The best option is to have insurance that covers uninsured motorists.

Property and Car Repairs

Even if you can get your medical expenses paid, this still leaves you with the damages to your car. And if you caused the accident and damaged property other than vehicles, this is an additional cost you are responsible to pay. Car and property repairs can be quite expensive. You may have to rent a car while yours is in the shop for repairs. If you are unable to pay for the property damage, you may be sued for compensation.

Car insurance is required by states to make sure medical expenses and car repairs can be paid in case of an accident. And car insurance protects your personal assets by reducing your financial risk if you hit or are hit by another driver.

Importance of Car Insurance