Why is Car Insurance Important?

Every year, almost 6 million car accidents occur across the country. Driving is dangerous, and you can be involved in an accident even if you did nothing wrong since you rely on other drivers to cooperate. That is why it is critical to be equipped for the worst-case scenario while driving. This is where auto insurance comes in. Read on to know why auto insurance is vital for car owners.

Car Insurance Is Mandated by Law

If you cause an accident, the liability coverage on your policy pays for the covered losses, such as the other party’s medical bills and damage to their vehicle or property. It also pays legal fees, which you will incur if you are taken to court for causing the accident. Each state has set a minimum auto liability coverage limit that drivers are required to purchase. The ‘limit’ is the maximum amount your insurance company will pay in the event of an admissible claim. You can also choose to increase the limit set by your state by paying an additional premium to your insurer. If you don’t do so, you may have to pay out of your pocket when the claim amount exceeds your coverage limit.

Car Insurance Offers Financial Protection

Without a car insurance plan, you could suffer huge financial losses in case of an unfortunate situation. If you cause an accident, you will be held responsible for any medical expenses incurred by the person you injured. You’ll also have to pay out of pocket if you damage their assets. In addition, if you damaged your own car in the accident, you’ll need to pay to get it fixed as well. Fortunately, a car insurance plan provides you with considerable financial protection, providing you with a sense of security and peace. Keep in mind that if you bought your car on loan, your lender would likely require you to have coverage as well.

Car Insurance Protects Your Passengers

The medical expenses and personal injury component of your policy will help pay for your co-passengers’ medical bills in the event of an auto accident, regardless of who was at fault.