Why do I need car insurance?

So, you know that you need to get auto insurance before you hit the road. You know you can’t drive without it, but the thing is that it’s pricey. Why do you even have to get car insurance? What’s the point of the lengthy list of coverages you can choose from? Why is it important to put some serious thought into insuring your car as opposed to just choosing the cheapest, bare-bones coverage you can find? These are all valid questions, and we’re going to answer them. Knowing why you need car insurance might make it easier to cough up the money for your bill.

5 reasons why you need car insurance.

1. Well, it’s the law.

So, here’s the thing:

Most states require drivers to carry car insurance – or liability coverage at the very least. The state sets the requirement of what coverage you need and how much coverage you need. If you don’t have the right insurance, you’re driving illegally. And you can get in big trouble if you get pulled over by a police officer and you don’t have insurance. Or – yikes – if you cause an accident and you don’t have insurance. It’s just one of those things you need to have in order to drive. (You wouldn’t drive if you didn’t have a driver’s license, right?) Anyways, that’s a pretty big reason that you need car insurance.

Be sure to check and see what the auto insurance requirements are for your state. The state has most likely set a minimum limit for the required coverages, but you can get higher limits to be sure that you’re super covered in case of an accident. (It’s also important to consider coverages that aren’t necessarily required by your state, but that can still protect you financially.)

2. Car insurance is a financial safety net if you cause an accident.

If you cause a car accident, you’ll most likely have a legal obligation to the other driver. Liability insurance can help you cover this legal obligation and pay the other driver what you owe them. Medical bills and car repairs are expensive, and these are the sort of costs you could find yourself having to pay for the driver you hit. Liability insurance can also help you cover your legal fees.

Let’s break down liability coverage:

Bodily injury liability: This can help pay for the other driver’s medical bills and pain and suffering if you cause an accident.

Property damage liability: This can help you cover the costs of repairing or replacing the other driver’s car…or other property damage you might accidentally cause.

So, that’s how car insurance can help you protect your bank account if you’re at fault in an accident and have a legal obligation to the other driver. Hence why you need car insurance.

There are lots of reasons why drivers need car insurance.

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3. Car insurance can help you repair or replace your car if it’s damaged (if you carry collision and comprehensive coverage.)

If you’ve chosen to carry collision coverage and comprehensive coverage, you can protect your bank account if your car is damaged. (As we explained above, liability insurance only helps cover your legal obligation to the other driver if you injure them in a car accident or damage their property. It won’t help repair or replace your car.)

But that’s where collision and comprehensive coverage can come in handy.

Collision coverage can help repair or replace your car if you’re in an at-fault accident or you, well, collide with something.

Comprehensive insurance can help you repair or replace your vehicle if it’s damaged by something other than a collision – for example, fire, falling objects, animal strikes, vandalism, or theft.

Now, these coverages might not be required by your state. But they can be a real lifesaver if something happens to your car and it’s damaged. Rather than raiding the piggy bank for the repair bill, you can simply file a car insurance claim. (Well, you’d still have to pay your deductible. Sigh. But still, better than paying thousands of dollars to repair or replace your car, right?)

4. Your lienholder may require you to carry collision and comprehensive insurance.

If you’re taking out a loan to get a car, you’ll have a lender, right? The people you have to give money to? Well, as you can imagine, the people you borrowed the money from are going to be quite invested in the welfare of your vehicle since it’s their money that helped pay for it. They’ll probably require you to have collision and comprehensive coverage so the car is protected by insurance – and can be repaired or replaced if need be. So, though your state might not make you get collision and comprehensive, your lender might.

5. Your UM/UIM (uninsured/underinsured) coverage can help you pay for your medical bills.

If you’re hit by a driver who doesn’t have enough insurance to cover all of your expenses after an accident (underinsured) or who doesn’t have insurance at all (uninsured), your UM/UIM coverage can help you cover your medical expenses. That way if you’re in an accident and the other driver doesn’t have the insurance to cover your medical bills, you wouldn’t be on the hook. (Again, this may not be required by your state – but that doesn’t mean it’s a bad idea.)

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So, yes, you may be wondering why you need car insurance, but hopefully, those are some compelling reasons that can help you shrug and begrudgingly admit that car insurance, while annoying, is not pointless. It’s a financial safety net – one that will accompany you as you hit the road in your beloved car.

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