Having car insurance is required by law in almost every state. If you are at fault in a car accident, the auto liability coverage mandatory on your car insurance policy supports paying for covered losses, such as the other party’s medical fees, damage to their vehicle, or other harm that results from the accident. It also supports paying your legal fees if you’re taken to court over the accident.
Car insurance may be mandatory.
Each state’s laws set minimum auto liability coverage limits that drivers are required to buy. A limit is the maximum amount your insurance company will pay towards a covered claim. You may want to increase your coverage limits beyond your state’s minimum requirements. Otherwise, you could end up paying out of pocket if, for instance, you cause a wreck that injures another driver and their medical bills exceed your coverage limits. Some states require you to have extra coverage on your car insurance policy, for example, personal injury protection or uninsured coverage.
Car insurance offers financial protection.
If a car accident happens, you may be held responsible for costs connected with it. These may include legal fees, the patient’s medical expenses, or their lost income if their damage leaves them unable to work. Liability coverage may support paying for these costs.
Your lender or leasing agent may require auto insurance.
If you’re financing or leasing your vehicle, your lender may require you to purchase collision coverage and comprehensive coverage. Since the lender or leasing agent is the lienholder of your vehicle while you’re making payments, these two coverages may help protect their investment. Comprehensive coverage may help pay to repair the vehicle if it’s damaged in a covered loss or also help in replacement.
If gap insurance is applied on your auto policy, this coverage helps pay off your car loan if the vehicle is stolen and you owe more than its depreciated value. Gap insurance comes under the optional category, and it typically works with collision coverage.
Car insurance can save you from the cost of repairs.
Even if you own your vehicle outright, you may want to have collision coverage and comprehensive coverage on your car insurance policy. While mandatory liability coverage helps pay for damage to another driver’s vehicle, it’s important to have coverage for your own vehicle. For example, what if your car is damaged in a hailstorm? Comprehensive coverage may help pay for repairs or replacement if your car is stolen or damaged by something other than a collision, such as falling objects or fire.
Collision coverage may help pay to repair your car.
Without comprehensive coverage, you have to use your pocket to get your car repaired.
Auto insurance helps protect your passengers.
Medical payment coverage and personal injury protection may support paying for your medical bills if you’re hurt or damaged in an accident. It may also help cover your passengers’ expenses because of the accident. This coverage helps support hospital visits, doctor bills, and surgery.
Auto insurance helps you protect yourself.
Liability coverage is an official requirement; many people go without it. Uninsured motorist coverage may support paying for your medical expenses if you’re damaged by a driver without insurance. This coverage is mandatory in some states.
Having the proper car insurance coverage in place can go beyond fulfilling a legal requirement. A car insurance policy may help to save your vehicle, your pocket, and even your peace of mind.