Why do you need car insurance?

If you drive a car, you’re responsible for your actions on the road. Accidents happen, and if you are at fault, you are liable for any damages stemming from the accident. This includes things like another party’s medical bills, the costs of repairing or replacing their car, or harm to surrounding property. And this is why car insurance is mandatory in almost every state.  

When you are fully insured, you are financially protected in case of accidents, especially when you are at fault. Additionally, car insurance can cover your legal bills if you’re taken to court over the accident.

Car insurance can seem like a considerable expense. However, a little research can help you discover ways to get cheap car insurance. Read on to learn more about why you need car insurance and how to save.

How Car Insurance Protects You 

Car insurance provides drivers with financial protection in the event of accidents, theft, fire, and other hazards. If you drive a car in the U.S., car insurance is mandatory in all but one state. While New Hampshire doesn’t require car insurance by law, you’ll need to prove that you can pay for any damages that result from an accident to drive without cover.

The biggest reason you need car insurance is that you have a liability to other drivers. In other words, you’re responsible for any damage that you cause.

Read on to learn more about the types of car insurance and how they protect you.

Liability Insurance

Liability insurance protects drivers against claims of damage or injury from an accident when they are at fault. However, liability insurance has several limitations. It won’t cover every situation that can happen. Additionally, there is no guarantee that you won’t face legal action if damages exceed your policy limit.

There are two parts to liability insurance:

• Bodily Injury Liability. The majority of state insurance laws require drivers to have bodily injury liability. This kind of insurance covers medical expenses for injuries sustained by drivers or passengers in a car accident.
• Property Damage Liability. Most state laws require drivers to have property damage insurance. It is a type of liability insurance that is used to cover damage to the other person’s car as well as things like fences, light poles, or walls that result from a collision.

These are sold together at a variety of limits you can choose from.

Personal Injury Protection Insurance

Personal injury protection insurance (PIP) provides the driver and passengers with coverage for medical expenses for injuries from a car accident. Generally, it’s only required in states that have no-fault insurance laws. However, it’s something that any driver should consider adding to their policy.

PIP will kick in to pay medical and related bills quickly, regardless of who is at fault in the accident.

​​Collision Coverage

Collision coverage covers any road-related accidents, like head-on collisions. It protects you against any losses that result from you getting into an accident with another car while driving. Collision coverage is the only way to get your car repairs covered if you are at fault in the accident.

Comprehensive Coverage

While state law doesn’t require comprehensive car insurance, it provides you vital protection. It’s frequently referred to as “other than collision” because it covers damages stemming from events like fire, theft, and falling trees. 

Full Coverage

Full coverage is a loose name given to policies that include liability, comprehensive, and collision coverage. These policies protect you against the most significant risks that can occur while driving a car. You may be required to carr full coverage if you have a loan or a lease on your car.

What is the cost of not having insurance?

Anything can happen when you’re on the road. And that’s why you need car insurance to make sure that you can repay damages that occur in the event of an accident. 

If you drive without insurance and get in an accident, things can get complicated quickly. For starters, the other driver can sue you for damages. 

A minor accident might cost a few hundred dollars, and an accident involving significant personal injury and property damage can run into hundreds of thousands of dollars. Meanwhile, an average American driver pays $138/month for full coverage car insurance or $1,655 annually. 

Additionally, in some states, if you don’t have car insurance, you might not be able to get compensation for your own injuries resulting from an accident. 

Having insurance means a claims adjuster can investigate your accident to determine which driver was at fault. Additionally, they can negotiate with the other parties’ insurance companies on your behalf. Without a car insurance policy, you lose this significant benefit.

What are some of the other costs of not having car insurance? 

Car insurance is important because it’s a legal requirement in almost all states. If your car is pulled over and you don’t have insurance, you can be in a lot of trouble. You might receive a fine, have your vehicle impounded, or have your license suspended. 

Additionally, there is a chance that you could go to jail. However, this only happens to repeat offenders.

Why You Need Car Insurance: The Bottom Line

Driving a car without insurance can lead to stiff fines and legal actions. Worse, if you are involved in an at-fault accident, you could face huge claims and damages from injured parties. Purchasing car insurance is the easiest way to avoid these dire outcomes. While many people think buying car insurance is confusing and expensive, you can get competitive deals if you shop around.