Many new car tend to struggle with the concept of auto insurance. After all, why should I pay so much for something I do not even see the value of? In some markets such as parts of California, it is normal for can insurance premiums to be so expnsive that they can easily be more than the cost of ownership of the car.
Frustrating as it may be, car insurance really is an important and necessary item no driver in the country should be without, and we will tell you why that is the case in this article.
1. It’s the law
Never mind the fact that having your car insured is a good idea in and of itself, but how about the fact that you can end up in jail if you don’t have your car insurance up to date? All states and jurisdictions in the United States have laws requiring bare minimum liability coverage.
The thought is that though you may be ok with taking the risk of getting into an accident and paying your own way, your actions can have an impact on other peoples’ lives and so the state wants some assurance that you will answer for those damages.
In lieu of asking you to verify financial capacity, they request proof of insurance whenever you renew your car registration and it is also the first thing that a police officer will ask for if you find yourself in a routine traffic stop.
2. It’s not how much your car is worth, it’s how much damage your car can cause
A common misconception many consumers have when it comes to car insurance is that they believe the main point of having auto insurance is to cover what it will cost you to repair your car in the event that you ever get in an accident.
It is easy to see why people have this perception, after all, that is basically how health insurance and home insurance work – to cover repairs to your body or home in the event that you suffer damages.
The main risk in auto insurance; however, is never the physical damage to the owner’s car (unless you drive a Bugatti or some other million dollar car), but rather the damages your car can cause to third parties.
An example of this is you can have $2,000 Honda Civic, but you can seriously injure a Mercedes carrying 4 passengers. You will be liable for the repairs to the Mercedes as well as for the injuries to all of the passengers.
3. It comes with benefits you may not even be aware of
Many people know the basics of car insurance – it covers you from liability damages and if you choose a collision plan it can even pay for your repairs should you get in an accident.
What you may not be aware of is that policies have evolved to include other benefits for little extra cost nowadays.
As an example, comprehensive coverage will pay for any kind of damage (provided you cover the deductible) that happens to your car.
Any kind of damage really means any kind, as it can even cover things like hail damage or your car being vandalized in a parking lot.
Another key and convenient benefit policies have nowadays is roadside assistance. Gone are the days of struggling on the side of the road with a dead battery or a flat tire.
Simply call your insurance company and they will usually have a roadside assistance company out to you within the hour, completely covered as part of your monthly insurance premium.
One of our favorite benefits here at Insurancebloginfo is the rental car coverage once you have been an accident. In almost all of the United States, it is very difficult to get around without a car to drive; therefore you must have some kind of vehicle in order to work or produce.
If you get in an accident, it is possible you may be without your primary car for weeks or even longer than a month if the damages are really bad or your repair shop if lacking some hard to find part for your car.
Rental car coverage covers whatever your rental car costs may be up to a certain amount for the duration of your primary vehicle undergoing repairs, givng you some invaluable peace of mind. Some companies are offering even more perks nowadays, such as mechanical breakdown coverage or what some are calling accident fogiveness.
Accident forgiveness is basically a program some insurance companies have where your insurance premiums won’t be affected if you get into an accident but you have had a long history of safe driving and no claims.
4. It can save you from lawsuits
Not only does your auto insurance cover you from being liable for paying for repairs to an auto in which you may be an accident with, but it also protects you from any lawsuits you may have as a result of an accident you cause.
Examples of a lawsuit that may come as a result of an accident are for physical damages and emotional damages due to said accident. Especially considering the fact that the United States is the most litigious country in the world, this protection provided by insurance policies becomes even more important, as there are entire law firms that specialize only in extracting as much money from drivers following an accident through lawsuits.
Now that you are equipped with the knowledge of what makes car insurance so important, it is critical that you keep this information in mind whenever you are thinking of letting your coverage lapse.
In the event that you find yourself without enough money to cover your monthly insurance payment, consider first calling your insurance company to see if they can be flexible so that you will not lose coverage. You may be surprised that many do have some flexibility here, and it is a much better option than driving illegally without the proper insurance coverage and leaving you exposed to potential bankruptcy.
My name is Jaime A, I am a licensed insurance producer in the Commonwealth of Puerto Rico for property and casualty insurance. I am an engineer by trade, but my true passion is helping consumers save money on their monthly bills. If you would like to learn more about me, you can visit my LinkedIn profile.