Car insurance is mandatory in most states. But, buying car insurance makes sense because it protects your savings and assets. Here are the important reasons why you need car insurance.
Each state has laws that set the minimum liability coverage each driver is required to buy. Whatever coverage amount you purchase is the maximum amount your insurance company will pay in case of a claim. So, the smart thing to do is increase your coverage limits so that you never have to pay out of pocket in case you cause a wreck that injures another driver and their medical bills are high.
If you cause a car accident, you will be responsible for the costs associated with it. This can include legal fees, medical expenses, lost income, property damage, and more. Liability insurance can pay for this instead of you having to sell your house or take a huge loan to pay these costs.
Lease and Lender Requirements
If you’re financing or leasing your car, the lender or leaser may require you to purchase collision and comprehensive coverage in addition to liability coverage. This is necessary so that they get to protect their investment. These coverages can help pay for vehicle repair or replacement in the event of an accident. They may also require gap insurance that pays off the loan if the car is totaled or stolen and you owe more than its depreciated value.
Liability insurance protects you from paying for damage to someone else. Collision and comprehensive insurance cover you and your vehicle. Comprehensive coverage pays for repairs or replacements in the event your car is damaged by anything other than a collision. Collision coverage helps repair your vehicle regardless of who is at fault.
Medical payments coverage and personal injury protection pay for your medical bills and those of any passengers that were injured while riding with you. It pays for hospital visits, doctor bills, and surgery.
A lot of people break the law by not purchasing insurance. If you’re hit by someone like that, uninsured motorist coverage will pay for your medical bills. Underinsured coverage pays in case their limits are too low.